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LATEST NEWS UPDATES | What’s fuelling higher inflation in rural India? -Vikas Dhoot

What’s fuelling higher inflation in rural India? -Vikas Dhoot

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published Published on Apr 17, 2022   modified Modified on Apr 22, 2022

-The Hindu

Why are food, clothing and fuel prices higher in the hinterland? Will a good monsoon help ease the crisis?

The story so far: The retail inflation rate surged to 6.95% this March — its highest level in nearly one and a half years, capping off six successive months of accelerating prices for consumers. With incremental fuel price hikes only kicking in during the latter half of March, the full impact of higher global oil prices being passed on to consumers will only begin reflecting in April. Economists expect inflation to go past 7% and hover around that level till as far as September. However, across large parts of the country, the experienced price rise has already crossed 7.5% and even 8%. Official data pegs rural inflation in March at 7.66%, with several States reporting even higher inflation, including West Bengal (8.85%), Uttar Pradesh and Assam (8.19%) as well as Madhya Pradesh (7.89%).

* How have urban and rural inflation trends differed over the past year?

Urban inflation has usually tended to be higher than rural inflation by an average of about 0.8 percentage points through most of 2021 — the only exceptions being August when both stood at 5.3% and May when rural inflation was 6.6% and urban inflation was 5.9%. In December 2021, urban inflation was 5.9%, while rural inflation was 5.4%. In contrast, March 2022 marked the third consecutive month that the pace of price rise in the hinterland outstripped urban India, and the gap has been widening rapidly. From a minor 0.2 percentage points higher inflation rate over urban India in January, rural inflation hit a nine-month high of 6.38% in February even as urban inflation declined to 5.75%. In March, the gap between the two has surpassed 1.5% with urban inflation at 6.12% and rural areas clocking 7.66%.

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The Hindu, 17 Apri, 2022, https://www.thehindu.com/business/Economy/explained-whats-fuelling-higher-inflation-in-rural-india/article65326392.ece


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