Editorial     

Published: December 31, 2023
Updated: December 31, 2023

Food inflation causing concern

It is unfortunate that at a time when several indicators of the Indian economy have turned favourable, the rising trend in consumer food price inflation is causing concern. Of late, prices of essential commodities like cereals, edible oils and vegetables have started going up. India’s retail inflation, which is measured by the consumer price index (CPI), surged to 5.55 per cent in November 2023 from 4.87 per cent in October 2023, according to the latest data from the Ministry of Statistics and Programme Implementation.

The lowest CPI this year was recorded in May 2023 at 4.25 per cent. It may be noted that in the last two years, CPI had hit the highest point of 7.79 per cent in April 2022 and the lowest of 4.06 per cent in January 2021. It is indeed worrisome that the CPI reading continues to cross the Reserve Bank of India’s upper tolerance medium-term target of 4 per cent within a band of 4+-2%.

It is an irony of fate that despite the government’s belated decisions to ban exports of essential commodities and the Reserve Bank’s resorting to a tight monetary policy, the monster of inflation has not been tamed. On the contrary, it is raising its ugly head again and again, and higher and higher.

RBI Governor Shaktikanta Das maintains that the monetary policy committee (MPC) will remain focused on withdrawal of accommodation as mentioned to ensure inflation does not obstruct growth prospects. The MPC will also take action promptly and appropriately to keep inflation expectations firmly anchored so as to bring down inflation to the targeted level. But there has not been the expected outcome from these measures. In fact, the RBI now projects headline inflation or the CPI for 2023- 24 at 5.4 per cent, as against 5.1 per cent projected earlier.

On the other hand, the rising trend in prices of essential commodities has made the life of low-income and lower middle- income groups miserable as the higher prices of rice, wheat, pulses, edible oils and vegetables have upset their budget.

For the lucky few in India, inflation is simply a moving point on a graph, an abstraction and a topic for chit-chat in elegant drawing rooms or in a luxurious room of a five-star hotel. For the not-so-lucky, it is a mathematical representation of silent everyday despair that strips away the common man’s dignity and erases his dreams and hopes.

From villages to small towns to metropolises, inflation has not spared lowincome groups – the story is repeated in a million voices, each unique in its private despair, but each sharing the same slow fading of hopes.

It is the misfortune of the Indian low- income group that the government of a socalled welfare state does not think inflation is a serious problem and is consciously or otherwise making the lives of poor and low-income people more miserable. The tragedy is that the government itself is culpable of ignoring the inflationary price spiral and goes on imposing GST on food items like milk, buttermilk, idli-dosa and upma.

The government can certainly tame the inflationary pressure by exempting food items from GST and bringing down excise duty on petrol and diesel. The tragedy is that the government is filling its kitty through GST collected by squeezing even the poor and low-income groups.