Economic Survey: Private tuition, doctor fee contribute most to inflation

This is an important insight into price situation in the economy, especially when inflation in health and education was more than the average general CPI

In a first-of-a-kind analysis of price rise in important services, the Economic Survey has shown that private tuition fees, doctors’ fees, bus fares and telephone charges were the areas that contributed the most to consumer inflation in the fiscal year 2018-19.

This analysis has been done from Labour Bureau estimates of consumer price index inflation for industrial workers (CPI-IW). 

This is an important insight into price situation in the economy, especially when inflation in health and education was more than the average general consumer price index-based (CPI) inflation. General CPI inflation had dipped in FY19 courtesy low growth in food prices. 

The Survey used the general CPI estimated by the National Statistics Office to show the interplay between goods and services inflation, and the CPI-IW to demonstrate those services under health, education, transport and communication which witnessed higher-than-average inflation in 2018-19. 

When it comes to education, analysis of general CPI shows that inflation in goods such as books and stationery was lower than that in services such as tuition and private coaching.

Analysis of CPI-IW showed that inflation in private tuitions, which had the highest inflation among education related spending, is on the rise again. 

In terms of health expenses of industrial workers, doctors’ fees have been rising the fastest among other expenses such as medicine. But for the populace in general, inflation in health goods such as medicine and family planning devices has been lower than that in health services such as consulting fees and lab tests. 

Telephone charges showed an inflation of more than 6 per cent in 2018-19 after many years of zero inflation.

Similarly, three years of low inflation in major transport modes used by workers-bus, rail and auto-was followed by a near 6 per cent inflation in 2018-19, the Survey showed. 

Rail was the only mode of transport that showed flat inflation in 2018-19 for industrial workers. This suggests that rail fares have not risen commensurate with overall price rise in recent years.