Bangalore: India's New Price Leader
Bangalore, India's prominent tech hub, has recently acquired a new title: the nation's most expensive city. An analysis of the Reserve Bank of India's (RBI) Consumer Price Index (CPI) reveals that Bangalore's cost of living surpasses the national average, with Mumbai trailing closely behind.
Decoding the CPI
The CPI measures the average price of a basket of essential goods and services, such as food, clothing, and transportation, across various cities. While Bangalore and Mumbai lead in the cost of living race, Delhi enjoys a more affordable lifestyle due to substantial government subsidies.
LPG Prices: A Case Study
The price of LPG cylinders, a staple in most Indian households, exemplifies the cost variations between cities. According to recent data from Bharat Petroleum, a 14.5-kg LPG refill costs Rs 415 in Bangalore, Rs 405 in Kolkata, Rs 402 in Mumbai (with a potential post-budget increase), Rs 399 in Delhi, and Rs 393.50 in Chennai. Bangalore's CPI peaks at 200, followed by Mumbai at 199, Kolkata at 184, and Delhi at a significantly lower 181, compared to the national average of 198.
Impact on Households
For Bangalore residents like Aditi Rao, a homemaker from Koramangala, managing household expenses is becoming progressively challenging. "Frequent hikes in the prices of basic items put our home budget out of sync every month," Rao, 34, explains. The rising costs are impacting the financial stability of many families.
Analyzing the Contributing Factors
Budget analyst Ravi Duggal, having lived in Mumbai and Delhi, attributes Bangalore's high cost of living to the booming IT industry. He acknowledges that various factors, including the aspirations of residents, contribute to the cost differentials between cities. "Where education is concerned, for instance, Delhi has more public education facilities than Mumbai," Duggal noted, highlighting the discrepancies in educational resources between major metropolitan areas.
Mumbai's Expense Conundrum
Similarly, Mumbai's high cost of living stems from multiple factors, primarily exorbitant rental rates. Economist Vibhuti Patel of SNDT University points out, "Over 40% of the salary of an average Mumbaikar goes into paying rent." This significant portion of income allocated towards rent puts a strain on the financial resources of individuals.