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Taming the big fat food inflation

  • Published
    19th Sep, 2023


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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