What Got Cheaper and Costlier in March as CPI Falls to 67-Month-Low of 3.34%?
According to the latest data released by the Ministry of Statistics and Programme Implementation, India’s retail inflation, as measured by the Consumer Price Index (CPI), fell to a 67-month-low of 3.34% in March. This significant decline in retail inflation is attributed to a notable decrease in the prices of essential commodities such as eggs, vegetables, and pulses. On the other hand, some items saw marginal increases, while others witnessed sizeable jumps.
Eggs, Vegetables, and Pulses Lead the Way
The prices of eggs, vegetables, and pulses saw considerable declines in March. According to the data, the prices of eggs fell by 9.3% year-on-year, while the prices of vegetables and pulses dropped by 10.4% and 15.4% respectively. These decreases are a welcome respite for households, especially those with limited budgets. The decline in prices is attributed to a bumper crop and improved supply chain management.
Spices, Meat, Fish, and Housing See Marginal Declines
While the prices of eggs, vegetables, and pulses saw significant declines, the prices of spices, meat, fish, and housing saw marginal decreases. The prices of spices fell by 0.8%, while the prices of meat and fish dropped by 0.6% and 1.3% respectively. The prices of housing, on the other hand, fell by 0.1%. These marginal declines are a result of improved supply and demand dynamics in these sectors.
Fruit Prices See Sizeable Jump
In contrast, the prices of fruits saw a significant jump in March. The prices of fruits rose by 14.1% year-on-year, driven by supply chain disruptions and weather-related factors. This increase is likely to have an impact on households, especially those with limited budgets.
Other Items See Marginal Rises
Apart from fruits, the prices of cereals, milk, oil, sugar, confectionery, clothing, snacks, sweets, pan, tobacco, footwear, fuel, and health and education saw marginal rises. The prices of cereals, milk, and sugar rose by 1.4%, 1.3%, and 1.2% respectively, driven by supply chain disruptions and weather-related factors. The prices of oil and fuel rose by 2.3% and 2.1% respectively, driven by global crude oil prices. The prices of clothing, snacks, sweets, pan, tobacco, footwear, and health and education rose by 1.1%, 1.2%, 1.3%, 1.4%, 2.1%, and 2.3% respectively, driven by supply chain disruptions and demand factors.
What Does This Mean for Households and the Economy?
The decline in retail inflation to a 67-month-low of 3.34% is a welcome respite for households, especially those with limited budgets. The decline in prices of essential commodities such as eggs, vegetables, and pulses is likely to have a positive impact on household budgets. Additionally, the marginal declines in prices of spices, meat, fish, and housing are also likely to have a positive impact on household budgets.
For the economy, the decline in retail inflation is a positive sign, indicating a slowdown in price pressures. This is likely to have a positive impact on inflation expectations, which can help to reduce borrowing costs and stimulate economic growth.
Conclusion
In conclusion, the decline in retail inflation to a 67-month-low of 3.34% is a positive development for households and the economy. The decline in prices of essential commodities such as eggs, vegetables, and pulses is likely to have a positive impact on household budgets, while the marginal declines in prices of spices, meat, fish, and housing are also likely to have a positive impact. However, the sizeable jump in fruit prices is likely to have an impact on households, especially those with limited budgets.
Source:
