India’s CPI(Consumer Price Index) shot up to 6.95 percent in March which was the highest in nearly 1 and a half years. It is also up by 0.69 percent from February and the highest since November 2020.
The month of March has become the third successive month having inflation greater than the RBI threshold of 6 percent. The monetary policy statement released by RBI governor Shaktikanta Das “In the sequence of priorities we have now put inflation before growth.
Time is appropriate to prioritize inflation and head of growth” signals the change of focus from growth to fighting inflation.
Some of the key takeaways from the index were :
- Food and beverages inflation hit 7.47%
2. Meat and fish prices recorded a 9.63% inflation
3. Oils and fats recorded inflation at 18.8%
4. Vegetable inflation passed 11.6%
5. Clothing and footwear inflation touched 9.4%
6. Services like health, transportation, communication, and recreation saw a 7-8 % inflation.
7. West Bengal recorded the highest retail inflation at 8.85%,
8. Uttar Pradesh and Assam recorded 8.19% inflation
9. Inflation rate for states like Madhya Pradesh, Telangana, Maharashtra, Bihar, Jammu & Kashmir, Haryana, Jharkhand, and Rajasthan stood between 7.4 to 7.8.
The rise in prices of fuel and food items has been the result of inflation. Inflation will moreover raise the interest rates for borrowers and will create a low-interest rate for investors. The inflation is likely to put a burden on middle-class families and will threaten a large section of society that is paying EMI on home loans.
With the increase in the interest rate for the borrower, the EMI would increase and thus many households would get affected. For the investors, high inflation with rates being low would result in a real interest-earning in negative.
Dharmakirti Joshi, CRISIL (formerly Credit Rating Information Services of India Limited)chief economist said that “Our analysis shows the poor are bearing the burden of inflation the most, given that food — which occupies the largest share of their consumption basket — recorded the sharpest rise”.
Some of the reasons for the high inflation are the Russia -Ukraine war and adverse weather conditions. The inflation is expected to accelerate more over the next few months.
Also, it is quite uncertain that inflation will dissipate soon because of India’s high import dependency. India imports edible and crude oil, fertilizers, and crude oil, which are already at high prices globally.
Edited By : Khushi Thakur
Published By : Shubham Ghulaxe
