Technically and economically , inflation and high price, these two things differ, but the basic effects of both are the same.
If the inflation is high, then the price in the market will also be high. Inflation is still a big and sensitive issue.
During the recent assembly elections in Karnataka, inflation was considered an issue by about 40 per cent voters. Expressed concern.
It is obvious that it must have affected the mandate as well, but the Reserve Bank of India is analyzing the trends of decreasing retail inflation since January, February, but now the month of May is passing, there is no visible effect on the market inflation.
So how is inflation different from price rise? This economics should be explained to the general public of the country.
The common consumer will evaluate inflation or cheapness on the basis of the price at which the goods or services are available in the market.
However, according to the Consumer Price Index, inflation in March was 5. 66 percent and fell to 4.7 percent in April. This trend is likely to continue.
RBI Governor Shaktikanta Das has expressed hope that month of May inflation may come down from April’s inflation, but has also sounded a note of caution as the war against inflation is not over yet.
We do not understand this double statement, as inflation is consistently below the ceiling of 6 per cent set by the Government of India and the central bank.
Moderation in core inflation is also clearly visible. The Consumer Price Index is also continuing at the level of 4.5 per cent.
This is an index of change in the cost of goods and services till May 12. Directly linked to the common consumers and their ability to spend.
ICRA’s assessment is also close to 4.5 per cent. These suggest that inflation in the first quarter of April-June will be below the RBI’s forecast of 5.1 per cent, but the RBI also estimated that inflation could rise to 5.4 per cent in the second and third quarters of 2023-24.
Broadly speaking, inflation will increase further. So what are the benefits of low inflation then?
Even today the common man is getting LPG cylinder paying about Rs.1150. Wheat and flour have become costlier. The prices of petrol and diesel are the same. Although crude oil is cheap in the international market. We are buying crude oil from Russia at even cheaper rates, that too in Indian currency Rupees. Milk has become costlier by Rs 10-11 per liter this year. The retail prices of pulses also remain unchanged. Edible oil has become a bit cheaper, but that too not sufficient especially for the working class.