Saturday, May 28th, 2022

Inflation hit: Not only the Russia-Ukraine war, there are other reasons for things to become expensive, know what will be its effect?


Summary

Retail inflation in March stood at 6.95 per cent. Which reached 7.79 percent in the month of April. Inflation rate is higher in villages than in cities. Inflation rate has remained above 4 per cent continuously since 2019-20.

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Retail inflation stood at 7.8 per cent in April. That is, compared to April last year, this year Indian consumers got everyday items at eight percent more price. This rate of retail inflation is the highest in the last eight years.

Not only this, it is also almost two times the target set by the Reserve Bank. In fact, from October 2016, the Reserve Bank has a rule to keep the rate of retail inflation at the level of 4 percent. However, there is a discount of two per cent in this, that is, it can be from two per cent to six per cent.

Is Ukraine-Russia crisis the reason for rising inflation in the country?
The rise in crude oil prices due to the ongoing war in Ukraine has contributed a lot to this increase in inflation. There was already a fear of rising prices. However, this has not happened because of war alone. Retail inflation has touched 4 per cent only once since October 2019. For the rest of the month, it was not only more than four per cent, but most of the time it also went above six per cent.

Inflation has been increasing continuously for the last seven months. Inflation in India was above 6 per cent since the beginning of the year. That is, even a month before the Russia-Ukraine crisis began, the rate of retail inflation was more than the prescribed limit. Most experts agree that there is little chance of relief in the coming months. Experts say that this rate will remain above 6 percent.

What are the reasons for rising inflation other than the Russo-Ukraine war?
Inflation rate has remained above 4 per cent continuously since 2019-20. Actually, inflation is calculated using the Consumer Price Index. This index has different categories with different weightings. There are many other things like crude oil, commodity prices, cost of production, among others, which play an important role in deciding the rate of retail inflation.

For example, in 2019-20, when the inflation rate was 4.8 per cent. At that time, the main reason for this was a six percent jump in the prices of food items. Similarly, in 2020-21, the country’s economy suffered a major setback due to the Corona epidemic. During that time also the prices of food items increased by 7.3 percent. At that time also the inflation rate was 5.5 per cent.

How much has the inflation rate increased since March?
Retail inflation in March stood at 6.95 per cent. Which reached 7.79 percent in the month of April. Inflation rate is higher in villages than in cities. While the inflation rate in the cities was 7.09 percent in April, the rate of retail inflation in the villages was 8.38 percent. In March also, inflation was higher in villages than in cities. In the month of March, where the rate of retail inflation in the cities was 6.12 percent. At the same time, the rate of retail inflation in villages was 7.66 percent. Talking about a year ago, the inflation rate was 4.23 percent. A year ago, inflation was higher in cities than in villages. In April 2021, the rate of retail inflation in cities was 4.71 percent, while in villages it was 3.75 percent.

Which things have become the most expensive?
Talking about food items, oil, vegetables and spices have become the most expensive. Oil prices have increased the most at 17.28 percent. At the same time, vegetables have become costlier by 15.41 percent compared to last year. Spices prices have also increased by 10.56 per cent.

Wearing clothes and shoes also became expensive
Other than food and drink, the most expensive shoes have been. Their prices have increased by 12.12 percent. Clothes have also become expensive by 9.51 percent. Transport and communication have increased by 10.91 percent, while fuel and electricity prices have increased by 10.80 percent.

Inflation hit the most on these things

edible oil

17.28%

Vegetable

15.41%

slippers

12.12%

transport and communication

10.91%

fuel and electricity

10.80%

Spices

10.56%

Source: mospi

Is the effect of inflation different on the people of different states?

Yes. The people of states like West Bengal, Madhya Pradesh, Haryana, Maharashtra have been hit the hardest by inflation. Inflation rate has increased the highest in West Bengal at 9.12 percent. At the same time, there has been an increase of 9.10 percent in Madhya Pradesh. Inflation in Haryana has increased by 8.95 percent in one year. Inflation rate in Maharashtra has gone up to 8.78 percent. Apart from this, the inflation rate in Assam, Gujarat, Odisha, Rajasthan, Uttar Pradesh and Jammu and Kashmir also remained above eight per cent.

Highest inflation in these states

West Bengal

9.12%

Madhya Pradesh

9.10%

Haryana

8.95%

Maharashtra

8.78%

Assam

8.54%

Uttar Pradesh

8.46%

Gujarat

8.20%

Rajasthan

8.12%

Source: mospi

What could be the effect of this rising inflation?
Rising inflation has an effect on many things. As rising inflation reduces the purchasing power of the people. As a result, aggregate demand falls. If the saver suffers, the lender benefits.

Expansion

Retail inflation stood at 7.8 per cent in April. That is, compared to April last year, this year Indian consumers got everyday items at eight percent more price. This rate of retail inflation is the highest in the last eight years.

Not only this, it is also almost two times the target set by the Reserve Bank. In fact, from October 2016, the Reserve Bank has a rule to keep the rate of retail inflation at the level of 4 percent. However, there is a discount of two per cent in this, that is, it can be from two per cent to six per cent.

Is Ukraine-Russia crisis the reason for rising inflation in the country?

The rise in crude oil prices due to the ongoing war in Ukraine has contributed a lot to this increase in inflation. There was already a fear of rising prices. However, this has not happened because of war alone. Retail inflation has touched 4 per cent only once since October 2019. For the rest of the month, it was not only more than four per cent, but most of the time it also went above six per cent.

Inflation has been increasing continuously for the last seven months. Inflation in India was above 6 per cent since the beginning of the year. That is, even a month before the Russia-Ukraine crisis began, the rate of retail inflation was more than the prescribed limit. Most experts agree that there is little chance of relief in the coming months. Experts say that this rate will remain above 6 percent.

What are the reasons for rising inflation other than the Russo-Ukraine war?

Inflation rate has remained above 4 per cent continuously since 2019-20. Actually, inflation is calculated using the Consumer Price Index. This index has different categories with different weightings. There are many other things like crude oil, commodity prices, cost of production, among others, which play an important role in deciding the rate of retail inflation.

For example, in 2019-20, when the inflation rate was 4.8 per cent. At that time, the main reason for this was a six percent jump in the prices of food items. Similarly, in 2020-21, the country’s economy suffered a major setback due to the Corona epidemic. During that time also the prices of food items increased by 7.3 percent. At that time also the inflation rate was 5.5 per cent.

How much has the inflation rate increased since March?

Retail inflation in March stood at 6.95 per cent. Which reached 7.79 percent in the month of April. Inflation rate is higher in villages than in cities. While the inflation rate in the cities was 7.09 percent in April, the rate of retail inflation in the villages was 8.38 percent. In March also, inflation was higher in villages than in cities. In the month of March, where the rate of retail inflation in the cities was 6.12 percent. At the same time, the rate of retail inflation in villages was 7.66 percent. Talking about a year ago, the inflation rate was 4.23 percent. A year ago, inflation was higher in cities than in villages. In April 2021, the rate of retail inflation in cities was 4.71 percent, while in villages it was 3.75 percent.



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