New Delhi, May 30 (FN Agency) Prices of discretionary services especially those catering to upper income groups of the population are on the rise as a result of easing pandemic restrictions and pent-up demand allowing a quick pass-through of input cost escalation to the consumers, rating agency CRISIL said in a report on Monday. “Inflation in services such as cinema tickets, domestic help/cook and tailoring, dropped in the first year of the pandemic. But it recovered in the second year, recording higher inflation in the recent six months,” it said. The report noted that transport services, particularly the ones catering to upper income segments, clocked the sharpest rise in inflation. “Airfares, for one, logged the highest inflation among services,” the report said.
As per the study, other modes of private transport such as taxis and school buses have also seen inflation above 7% in the past six months. In what seems a respite for lower income segments, public transport services such as railways, bus and trams have seen only a modest rise. The report said that some services, whose importance rose post pandemic, recorded a sharp rise in inflation last year. These include health services, and work-from-home related essentials such as mobile and internet expenses. CRISIL said that demand recovery being witnessed this fiscal will only further drive the generalisation of inflationary pressure across other service segments. “That, alongside surging costs, will push producers to pass on the price rise to consumers,” the rating agency said. The consumer price index (CPI)-based inflation registered an eight-year high this April on the back of an all-round rise in commodity, food and fuel prices but services inflation was still sedate. “But of late, it is beginning to tick up too,” noted the report