Retail inflation showed signs of acceleration again in June 2020, according to the first such data released since March. In contrast to the inflation peak attained in December 2019/January 2020 due to a rapid surge in vegetable prices, this time the cost increase in meat, fish, pulses (all protein sources), milk, electricity and transport fuel led to the spike.
Inflation rises again
The graph shows the year-on-year change in India’s overall, urban and rural retail inflation rates. After peaking in Jan. 2020, inflation rates decelerated till COVID-19 hit in March. Rates started to rise in June again.
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Rural inflation
In rural areas, pulses (16.1% increase y-o-y), meat and fish (14.9%), milk (8.6%), cereals (6.5%) and transport (6.7%) were dearer. Fruits recorded deflation (-1%) and vegetables (4.6%) saw relatively minimal inflation.
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Also read: Editorial | Inflation alert: On rising prices
Urban inflation
In urban areas, meat and fish (18.7% increase y-o-y), pulses (17.9%), transport (7.6%), fuel and light (9.2%) and milk (8.3%) were dearer. Fruits (-0.4%) and vegetables (-2.7%) recorded deflation. So, in both rural and urban areas, unlike in Dec. ’19/Jan. ’20, vegetables did not contribute to inflation. In fact, they moderated the price rise.
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Unstable staple
July 2020 data suggest a definite price rise in staple vegetables. Tomatoes and potatoes were costlier, while onions, which were dearer in December 2019/January 2020, were less costly.
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Source: MoSPI, Department of Consumer Affairs
