The Hindu : Tamil Nadu News : No insulation from the shock of inflation

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Tuesday, Jun 24, 2008
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Tamil Nadu

Tamil Nadu

No insulation from the shock of inflation

Sruthi Krishnan

From contractors to repairmen, incomes are down

photo: K.V. Srinivasan

An electrician at work.

The surging prices are eating into the incomes of the self-employed. S. Kaspar Manuel is a case in point. The licensed electrical contractor from Mylapore says that if inflation continues at the current rate, it will be difficult for him to survive. His profit margin which was 10-15 per cent in 2005, has sunk to 5 per cent, he says.

The contract values are fixed based on the prices at the time of signing. If prices escalate, he has to bear the difference. Copper wire which used to cost Rs. 130 a kilo in 2005 is now Rs. 450. The prices of PVC conduits, switches, fans and lights have also risen. Projects signed at Rs. 6 lakh sometimes end up costing him Rs. 7 lakh, he says.

“We are surviving because of the ration shop,” says K. Lakshmanan from Gopalapuram, another veteran. After 30 years of service, 52-year-old Lakshmanan, with a family of four, does not have any savings.

He finds his salary of Rs. 6000 stretched to its limit. With no insurance, after retirement he has to continue to work as a watchman, he says. Younger electricians say their mobile phone bills are killing them.

“If we don’t have mobile phones, I won’t know where my brother is and he won’t know where I am,” says 23-year-old Sunil Kumar, an electrician from K.K. Nagar. The total bill for mobile phones comes to Rs. 2000, which is a considerable chunk of the family’s income. An Industrial Training Institute graduate, he earns Rs. 5,300 per month. His brother brings in Rs. 6000.

Rent

Their rent went up by Rs. 500 three months ago, adding to their costs. Sunil says he is finding it difficult to pay back loans. His 28-year-old brother will get married soon, and that means more expenses, he points out.

R. Manikandan, an electrician in Tambaram has found a way to keep his savings intact – he increased the price of his services.

The price of fixing a fan rose from Rs. 30 to Rs. 40; fixing a heater went up by Rs. 50. He feels that if he gets more customers locally, he can bring down his expenses.

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