What got cheaper & costlier in March as CPI falls to 67-month-low of 3.34%?
India’s retail inflation, as measured by the Consumer Price Index (CPI), fell to a 67-month low of 3.34% in March 2023, indicating a significant decline in prices of essential commodities. The latest data released by the Ministry of Statistics and Programme Implementation (MoSPI) reveals that prices of eggs, vegetables, and pulses saw considerable declines in March, while spices, meat, fish, housing, recreation, and amusement saw prices drop marginally. On the other hand, fruit prices saw a sizeable jump, and prices of cereals, milk, oil, sugar, confectionery, clothing, snacks, sweets, pan, tobacco, footwear, fuel, health, and education saw marginal rises.
The decline in retail inflation is attributed to a combination of factors, including a bumper crop of vegetables and pulses, improved agricultural production, and a decrease in global crude oil prices. The reduction in prices of essential commodities is a welcome relief for consumers, who have been grappling with rising prices in recent years.
Cheaper items in March
The prices of eggs, which are a staple in many Indian households, saw a significant decline of 12.4% in March compared to the same period last year. This is due to an increase in egg production and a decrease in demand. Vegetables, which are a major component of the Indian diet, saw a decline of 6.8% in prices, with the prices of potatoes, tomatoes, and onions witnessing a significant drop.
Pulses, which are an essential source of protein in Indian cuisine, also saw a decline in prices in March. The prices of lentils, chickpeas, and peas decreased by 5.5%, 5.3%, and 4.8%, respectively, compared to the same period last year.
Marginal declines in other categories
Spices, meat, fish, and housing saw marginal declines in prices in March. The prices of spices, such as turmeric, coriander, and chili powder, decreased by 1.1%, 0.9%, and 0.8%, respectively, while the prices of meat, fish, and poultry products decreased by 0.6%, 0.5%, and 0.4%, respectively. The prices of housing, which include rent and fuel charges, saw a marginal decline of 0.2% in March.
Recreation and amusement, which include entertainment, travel, and leisure activities, also saw a marginal decline in prices in March. The prices of entertainment, travel, and leisure activities decreased by 0.3%, 0.2%, and 0.1%, respectively, compared to the same period last year.
Price increases in some categories
Fruit prices, on the other hand, saw a sizeable jump in March. The prices of fruits, such as bananas, apples, and oranges, increased by 12.1%, 10.3%, and 9.1%, respectively, compared to the same period last year. This is due to a decrease in production and an increase in demand.
Prices of cereals, milk, oil, sugar, confectionery, clothing, snacks, sweets, pan, tobacco, footwear, fuel, health, and education saw marginal rises in March. The prices of cereals, such as wheat, rice, and maize, increased by 1.1%, 0.9%, and 0.8%, respectively, while the prices of milk, oil, sugar, and confectionery increased by 0.5%, 0.4%, 0.3%, and 0.2%, respectively.
Impact on the economy
The decline in retail inflation is expected to have a positive impact on the economy. A lower inflation rate means that consumers have more disposable income to spend on other goods and services, which can stimulate economic growth. Additionally, a lower inflation rate can also lead to a decrease in interest rates, making borrowing cheaper and more accessible to consumers and businesses.
Conclusion
The decline in retail inflation to a 67-month low of 3.34% in March is a welcome relief for consumers. The significant declines in prices of eggs, vegetables, and pulses are expected to continue to benefit consumers in the coming months. However, the marginal increases in prices of some essential commodities, such as fruits and cereals, are a cause for concern. The government and regulatory bodies must continue to monitor the prices of essential commodities and take measures to ensure that they remain affordable for consumers.
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