Recently the rates of Consumer Price Index, Core Inflation, Wholesale Price Index have been announced. On average, the inflation rate is lower than the target rate, so the Indian government can boast that it has kept inflation under control, but the reality is something else.
In simple and easy words, ‘food inflation’ is still high for the common man. Inflation is still very high.
Of course, in the language of economics, the Consumer Price Index makes it clear that the annual retail inflation in October is 4.87 percent.
It was 7.44 percent in July, due to which it has been continuously decreasing. Core inflation has been reported at 4.28 percent, but it does not include rising prices of food and fuel.
It has been told that this rate has been the lowest in 43 months.
The wholesale price index was down by minus 0.52 percent. It is being claimed that food inflation came down to 2.53 percent in October.
This inflation in the month of September was 3.35 percent. Inflation based on the Wholesale Price Index has been continuously below zero since April, in that sense there is news of relief on the inflation front, but Reserve Bank of India (RBI) Governor Shaktikanta Das considers it a ‘very sensitive situation’.
In fact, the prices of food items have been the fundamental problem and they define inflation. Some tough and sticky factors related to food inflation are worrying the Modi government and the RBI ahead of the 2024 general elections.
In fact, the retail inflation of dal-roti i.e. grains and pulses is around 10.65 percent.
It has been in double digits for the last 14 months, till September 2022. Pulses have also become expensive by double the rate for the last five months. Their current inflation is 18.79 which has been the highest since August 2016.
This may be directly related to monsoon. Food inflation, estimated at 6.61 per cent, is higher than the general consumer price index. Along with food, there are also vegetables, lack of seasonal supply of which troubles the common citizen again and again.
As a result, in July-August, tomatoes were sold at Rs 200 per kg and nowadays onions are being sold at Rs 70-80 per kg. If we look at our daily plate, grains, pulses, vegetables etc are becoming expensive.
It is another system that in one season the farmers have to throw the crops of tomato, onion, potato etc on the roads or destroy them because they do not get the expected price.
Tomatoes and onions are sold at high prices in one season. The question is who decides these prices?
Its economics are neither known to the common consumer nor disclosed by the government, as there is no fixed regulator.
It is clear that vegetable markets are ‘uncontrolled’ bodies, in which hoarding and black marketing are also inherent. In terms of grains, the Agriculture Ministry estimates that the grain production during Kharif will be around 66 lakh tonnes, which is less than last year.
Paddy production may decrease from about 11 crore tonnes to a little more than 10 crore tonnes.
Kharif season pulses production has been the lowest since 2015. Obviously the inflation of grains and pulses will be high.
However, free ration will continue, hence wheat-rice storage is being improved.