India’s retail inflation reached a four-month high of 5.69 percent in December. The National Statistical Office (NSO) released the figures on Friday, January 12. According to which, inflation has increased due to increase in prices of food items like pulses, spices, fruits and vegetables. Earlier in November, retail inflation was 5.5 percent, whereas in October it was 4.87 percent.
Let us tell you, RBI has kept the range of inflation rate between 2% to 6%. RBI tries to keep the retail inflation rate at 4%.
What became cheaper and what became expensive?
- The annual rate of food inflation, measured by the Consumer Food Price Index (CPI), increased from 8.70 percent in November to 9.53 percent in December.
- In December, food inflation was recorded in double digits at 10.42 percent in urban areas and 8.49 percent in rural areas.
- The inflation rate in the food and beverages segment increased from 8.02 percent in November to 8.70 percent in December.
- The inflation rate of vegetables increased to 27.64 percent in December from 17.70 percent in November. Inflation rate of pulses and spices increased from 20 percent level in December to 20.73 percent and 19.69 percent respectively.
- The grain inflation rate also remained high at 9.93 percent, though it was slightly lower than November’s 10.27 percent.
- Inflation rate in services reduced from 4.38 percent in November to 4.07 percent in December.
- The inflation rate of clothing and footwear declined from 3.90 percent in November to 3.61 percent in December.
- Housing inflation increased from 3.55 percent in November to 3.63 percent in December.
- Fuel and Light was negative at (-)0.99 percent in December, while it was at (-)0.77 percent in November.
- Retail inflation rate in rural areas increased from 5.85 percent in November to 5.93 percent in December.
- Inflation print in urban areas was recorded at 5.46 percent in December, whereas it was 5.26 percent in the previous month.
Which state has the highest inflation?
Nine of the 22 major states and union territories recorded inflation rates above the headline inflation rate of 5.69 percent in December. In which the highest inflation rate was seen in Gujarat.
- Gujarat- 7.07 percent
- Rajasthan- 6.95 percent
- Haryana- 6.72 percent
- Karnataka- 6.65 percent
- Maharashtra- 6.05 percent
How does inflation increase and how is it measured?
Now let us understand how inflation increases and how it is measured. The growth and decline of goods in the market depends on the demand and supply of people. Let us assume that if people have more money, they will go to the market and buy more things, in such a situation, the demand will increase in the market by buying things and if the supply is not according to the demand, then the price of the goods will start increasing. This is how things become expensive.
Common people buy goods from the retail market. The Consumer Price Index (CPI) works to show the changes in prices related to this. It measures changes over time in the level of retail prices of selected goods and services.
There are four types of CPI-
- Industrial Workers (IW)
- Agricultural Laborer (AL)
- Rural Laborer (RL)
- CPI (Rural/Urban/Combined)
Of these, the first three data are collected by the Labor Bureau in the Ministry of Labor and Employment. Whereas the fourth type of CPI is compiled by the Central Statistics Organization (CSO) under the Ministry of Statistics and Program Implementation.
