A spike infuel prices, which are near record highs, is not just impacting the inflation number but may be forcing consumers to cut nondiscretionary spending, including on health, as it eats into their consumption expenditure, a report by the State Bank of India's research wing hassaid. "Our analysis of SBI card spends indicates that spend on non-discretionary health expenditure hasbeen substantially reduced to accommodate increased expenditure on fuel. In fact, such spending has more than crowded out the spending on other non-discretionary items, like grocery and utility services to suchan extent that the demand for such products has significantly declined. The share of nondiscretionary spend on items like fuel has jumped to 75% in June, 2021 from 62% in March, 2021, "it said. Citing the data, the agency argued that there was an urgent need to lower fuel prices through tax rationalisation. While the governments, at the Centre and in states, have been mopping up revenue through high excise and VAT on petrol and diesel, economists have now started suggesting a reduction in levies. A recent report by CARE Ratings had suggested that petrol in India, which costs over Rs 100 a lite in many parts of the country, was dearer than BRICS, Indonesia Thailand and the US, among others. The share of non-discretionary spend on items like fuel has jumped to 75% in June, 2021 from 62% in March, 2021. A 10% jump in fuel prices results in half-a-percentage point increase in retail inflation, which is already above RBI's 6% tolerance level it says. Economists are suggesting a reduction in levies on fuel. Pointing out that the first question to be addressed was at what stage can Sebi step in, the tribunal said that the regulator could have passed an order after the EGM. Sebi's advocate argued that the allotment would result in achange in control and consequently an open offer. He said that the price of shares in the preferential issue would also have a bearing on the open offer price and result in small investors being short-changed. Sebi's counsel cited the leter written by PNB to its subsidiary, asking it to abide by the articles of association.
