Inflation

Subject :Economy

Since January 2022, rural retail inflation has never been lower than urban numbers in the country.

Details:

In 2021, rural inflation was higher than urban inflation just once in 2021, (May 2021) and for eight months in 2020.
West Bengal showed the highest inflation rate at 8.94 per cent.
- Rural inflation at 10.29 per cent, the highest in the country, compared to 7.42 per cent in urban areas.

Causes for high CPI inflation in rural areas:

Food products have a weight of approximately 54 per cent in rural versus almost 36 per cent in urban.
- Inflation for food is almost the same for both – rural 7.5 and urban 7.6 per cent, given the weights, there is an upward thrust to rural inflation.
- Cereals, milk, fruits and spices showed higher inflation rates in rural markets, compared to urban ones.
  - Cereals -10.08% vs 8.65%
  - Fruits– 8.67% vs 5.98%
  - Milk and milk products -6.67% vs 6.05%
  - Spices-15.19% vs 14.41%
Accessing fuel and light has also become costly for rural and urban populations.
- The inflation rate for fuel was 5.58 per cent in rural areas and 6.84 per cent in urban areas.
Pulses, sugar and confectionery, non-alcoholic beverages, food and beverages and clothing showed a similar increase in inflation rates.

Concept:

The Price Statistics Division (PSD) of the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) started compiling Consumer Price Index (CPI) separately for rural, urban, and combined sectors on monthly basis with Base Year (2010=100) for all India and States/UTs with effect from January 2011.
Components: