Bengaluru’s Rising Cost of Living: What’s Burning a Bigger Hole in Residents’ Pockets?

Bengaluru residents are increasingly feeling the strain as the cost of living continues to rise. From milk and electricity to transport and healthcare, the spike in prices across essential services has strained the household budgets. For many families still recovering from the economic impact of the pandemic, the financial burden is becoming harder to bear.

A OneIndia analysis reveals that the prices of nearly 15 essential goods and services have gone up. While income levels have remained stagnant and many families still recovering from the pandemic's economic fallout, these price hikes are making it increasingly difficult for Bengaluru's middle and working classes to keep up with the city's growing cost of living.

The growing frustration came to a head on social media when a Bengaluru-based techie admitted that even a sizable paycheck wasn't enough to afford a comfortable life in the city. While some blamed poor budgeting, many resonated with his concerns-pointing to relentless price hikes and inadequate government support as key reasons why the city is fast becoming unaffordable for the average resident.

Transport Costs Continue to Climb

Price hikes in the transport sector are particularly hard-hitting. The state government has introduced a ₹500 cess on new vehicle registrations, on top of existing road taxes that range from 13-20%. This move, aimed at funding infrastructure, has added to the financial burden of vehicle buyers.

Cab Fare Hike

Cab fares have seen a price hike too, with app-based services raising both base and per-kilometre rates. Auto-rickshaw unions are now demanding their own increase-from ₹30 to ₹40 for the first 2 km and from ₹15 to ₹20 for every additional kilometre.

Fuel Prices Climb, Adding to Commuting Costs

Fuel prices in Bengaluru have steadily risen over the past year, putting further strain on commuters and transporters. Since June 2024, petrol has gone up by ₹3 per litre, now costing ₹102.84. Meanwhile, diesel prices in Karnataka rose by ₹2 per litre-now at ₹90.90-following a sales tax hike from 18.4% to 21.17% as of 1 April.

The hike follows the Karnataka government's decision to revise sales tax rates on both fuels, contributing to higher daily commuting expenses and elevated costs in goods transportation.

Nandini Milk Price Hike

Milk prices in Karnataka continue their upward trend, with the Karnataka Milk Federation (KMF) announcing a ₹4 per litre hike in Nandini milk, effective April 1. This follows two earlier increases-₹3 in July 2023 and ₹2 in June 2024. As a result, a one-litre pack of Nandini toned milk now costs ₹46, up from ₹40 last year. While KMF maintains that Nandini remains more affordable than brands like Amul and Heritage, the repeated hikes are straining household budgets.

Electricity Bills to Rise

Electricity costs in Karnataka are set to rise, with the Karnataka Electricity Regulatory Commission (KERC) approving an increase in fixed charges for the next three years. The revised tariffs, impacting both households and businesses, will be reflected in power bills starting May. However, beneficiaries of the state government's Gruha Lakshmi scheme-which provides free electricity-will remain exempt from the hike.

Stamp Duty and Property Costs Surge

Those looking to buy property are facing an uphill battle as stamp duty charges have risen sharply-by as much as 200-500%. Stakeholders, particularly in the real estate sector, have urged the government to roll back the increase, but there's been no change in policy so far.

Also, revisions in guidance value-the minimum rate at which properties can be sold-have led to higher property registration fees. These changes are not only pushing up property prices but also slowing down real estate transactions as buyers hesitate.

Healthcare and Education Become More Expensive

The healthcare sector has seen a 10-20% price hike in hospital fees and diagnostic tests. This rise disproportionately affects the underprivileged and has reignited demands for more accessible public healthcare.

In education, college fees for professional courses have gone up by about 10%. This price hike has sparked debate over affordability and its potential to drive dropout rates higher.

Electric Vehicles and Agriculture Under Pressure

Electric vehicles priced above ₹25 lakh are now taxed at 10%, impacting the sales of premium EVs. This tax comes despite ongoing efforts to promote green mobility and reduce air pollution.

In agriculture, farmers are facing a 30% increase in the price of sowing seeds, which threatens food production and could lead to higher prices for vegetables and fruits across the state.

Lifestyle, Utilities, and Public Services Get Costlier

Bengaluru's nightlife is feeling the effects of higher excise duties, with liquor prices climbing across most brands. This has resulted in a noticeable drop in footfall at bars and pubs, some of which are now facing closure due to unsustainable operating costs.

Garbage Tax

The introduction of a new garbage collection user fee-ranging from ₹10 to ₹400-is set to increase annual property taxes. Critics warn this may lead to a spike in tax defaults, as citizens push back against the mounting charges.

Bus Fare Hike

In another blow to the public, the state government has raised bus fares by 15% to help offset losses in state-run transport corporations. However, the hike has sparked protests, as it disproportionately affects workers and low-income commuters.

Auto Fares Set to Rise

Commuting in Bengaluru may soon get costlier, with auto-rickshaw unions pushing for a fare revision. They are seeking an increase in the minimum fare from ₹30 to ₹40 for the first 2 km, and from ₹15 to ₹20 for every additional kilometre. If approved, the move will add to the growing transport expenses for daily commuters.

MLA Salary Hike Amidst Public Backlash

At a time when citizens are struggling to manage rising costs, Karnataka's MLAs have granted themselves a 100% salary hike. The move has sparked outrage, as not a single elected representative has refused the increase-despite public frustration over recent hikes in taxes and service fees.

Critics say the decision only widens the gap between the political class and the average citizen, many of whom are struggling to keep up with the pace of inflation.