Friday, 12 Sep, 2025
The figures for June have come as a pleasant surprise as most analysts and economist were expecting inflation rates to remain high
The government recent released the latest data on retail inflation which shows that the rate of inflation as per the Consumer Price Index in June 2022 dipped marginally to 7.04% from 7.07% in the previous month. In April, 2022, the inflation rate had shot up to 7.79% forcing the Reserve Bank of India to raise interest rates in a move to curb rising inflation. The figures for June have come as a pleasant surprise as most analysts and economist were expecting inflation rates to remain high because of very high crude oil and food prices. The Governor of the RBI, Shaktikanta Das admitted publicly as much when he singled out these two factors being the primary drivers of high retail inflation in the country. He had also stated that inflationary pressures will be strong in the first half of this financial year that ends in October, 2022.
But beyond the jargon and rhetoric, what does this mean for the ordinary citizen of the country? Who is the Aam Aadmi? One good indicator is the data set that shows how the Union Government has been giving free food to 800 million Indians since April, 2000. That is roughly the size of the Aam Aadmi population in the country. These 800 million Indians are not bothered about high flight ticket prices or an increase in the showroom price of an SUV. They are more concerned with prices of items of daily use like food, fuel and transportation. On this front, the ordinary Indian citizen still feel aggrieved and hurt. Food and other essential goods and services constitute more than two thirds of the Consumer Price Index.
As the accompanying chart shows, some of them remain very high, adversely affecting family budgets. For instance, the inflation rate for edible oil in May, 2022 was 13.8% while that for vegetables was an extremely high 22.04%. Even transport and communications, that basically means commuting and mobile phone costs displayed an inflation rate of 10.84%. It is the high and rising prices of these goods and services that have badly affected family and household finances as repeatedly revealed by C Voter-India Tracker surveys since March 2020.
But the latest set of data also indicate that there is light at the end of the tunnel. For one, edible oil prices have started coming down as analysed in a story published in India Tracker a few days ago. Most importantly, as it is becoming clear that the monsoons this year maybe be below par but not a failure, the Kharif harvest that will start flooding the markets after October will lead to a reduction in vegetable prices. Ordinary Indian families will be relieved if they can buy vegetables, other food item, edible oils at affordable prices. Let’s see what happen when the festival season arrives later this year.
