19th September 2023 (8 Topics)
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Taming the big fat food inflation
Context:
The increasing trend of food inflation in the country has led to a made it a political agenda for elections, but with fewer results.
India's Inflation Challenges
- Inflation trends: India's headline inflation remains high at 6.83%, above the acceptable range of 2-6% set by the Reserve Bank of India.
- Food inflation: it is a crucial factor for the public, is still at 9.19%, influencing political outcomes.
- Political Impact: Past elections have been shaped by rising food prices, such as the "Onion elections" in 1980 and 1998.
Persistent Food Inflation:
- Increasing Consumer Food Price Index (CFPI): Despite overall inflation dropping, food inflation remains concerning at 9.19%, with Consumer Food Price Index (CFPI) even higher.
- Rapid rising Vegetable prices: They have soared by 26.14%, with spices and pulses following closely.
- Creating Urban-Rural Divide: Rural areas face higher food inflation, creating a significant urban-rural divide.
State Disparities
- Politicization of price-rise in states: Inflation rates vary across states, potentially leading to political debates in upcoming elections.
- Varied growth: Maharashtra, a top onion-producing state, has shown slower production growth compared to Bihar, Madhya Pradesh, and Karnataka.
- Supply-Side Solutions: Low-production states must improve yield, invest in supply chains, and avoid market-distorting measures for effective inflation management.
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