Rising Inflation Across India
The latest retail inflation data for October, which showed a surge to 6.2%, highlights the growing inflationary trend across India, largely driven by food prices. Vegetables, cereals, fruits, oils, and fats were identified as key contributors to this price rise. Among the 22 states and UTs for which data is available, half reported inflation rates above 6%. Delhi had the lowest rate at 4%, with West Bengal and Maharashtra also seeing relatively lower inflation levels.
Food Prices Remain the Key Driver
Food prices, particularly for vegetables, have been a significant factor in the nationwide increase in inflation. As a result, the Reserve Bank of Indiaâ€s (RBI) upper tolerance band of 6% was breached, raising concerns about the potential impact on interest rates. The surge in food prices has also led to a broader discussion on the role of monetary policy in controlling inflation.
Debate Over RBI’s Approach to Inflation Control
Experts suggest that varying inflation rates across states can be attributed to several factors, including supply chain issues. In light of the rising prices, Commerce Minister Piyush Goyal has called for a reduction in interest rates, arguing that targeting food price inflation through monetary policy is an “absolutely flawed theory.†However, RBI Governor Shaktikanta Das has cautioned that inflation risks, particularly from food prices, could continue to rise. He emphasized that a rate cut should not be assumed.
As inflation continues to affect households, experts and policymakers are likely to continue debating the best approach to address the issue in the months ahead.
(Inputs from TOI)
