Price hike looms over Karnataka as essential commodities witness surge from August 1

Residents of Karnataka are bracing themselves for an increase in their monthly expenses as the state witnesses a surge in the prices of essential commodities from Tuesday, August 1. The price hike is set to impact groceries, milk, dining out in hotels, vegetables, liquor, transportation, and construction materials, creating potential financial strain for households and businesses.

One of the significant changes is in the price of milk, particularly Nandini milk, sold under the brand Karnataka Milk Federation (KMF). The KMF's proposal to increase milk prices by Rs 3 per litre was approved by the Karnataka Cabinet on July 27. As a result, the retail price of toned milk will rise from Rs 39 to Rs 42 per litre, with the KMF justifying the hike due to the increased cost of dairy inputs. They assure that the entire Rs 3 per litre hike will be passed on to dairy farmers on their rolls.

Dining out in restaurants is also expected to become more expensive, with prices likely to rise by around 10% due to the increase in vegetable and grocery costs. Hotel owners have already informed patrons about the forthcoming price hike, expressing concerns about the impact on their business operations.

Residents have already experienced the shock of rising vegetable prices, with tomatoes witnessing a significant surge. The price of one kilogram of tomatoes in Bengaluru on Monday ranged from Rs 160 to Rs 180. Other vegetables, including green peas, green chilli, ginger, carrot, and beans, have also seen price increases of nearly 100% in recent weeks, indicating further potential rises in the coming days.

Liquor prices, including beer, will also see an uptick starting August 1, following the proposed hike in the excise duty in the 2023-23 Karnataka budget. Chief Minister Siddaramaiah has proposed a 20% increase in the duty on Indian Made Foreign Liquor (IMFL) in all slabs and a jump from 175% to 185% on beer.

In addition to these changes, the Karnataka government's proposal to increase the guidance value of immovable properties by 14% from August 1 will impact property registration rates. Moreover, the fare for occasional contract buses operated by the Karnataka State Road Transport Corporation (KSRTC) will see a hike ranging from Rs 2 to Rs 5 per kilometer from the same date.

Furthermore, the royalty payable on mining will increase, leading to higher costs of construction materials like gravel and sand, thereby pushing up construction expenses. Motor vehicle tax payable on school/college vehicles, cabs, and trucks will also see a rise from August 1. The price hike is partly driven by the Congress government's decision to implement its five guarantees announced ahead of the Karnataka assembly polls in May 2023.