Prime Minister Imran Khan said on Saturday that the country’s Sensitive Price Index has shown a decline for the second consecutive week compared to other countries in the subcontinent.
“Our Sensitive Price Index shows a decline for second consecutive week, in contrast to the situation in other parts of the subcontinent,” tweeted PM Imran along with a Reuters story regarding inflation in India.
The premier vowed that his government will work to bring inflation “further under control”.
High food prices hurting India’s poor, pain to persist
The Reuters story shared by PM Imran reported that India’s retail inflation may stay elevated for at least three more months after hitting a six-year high in October, as excess rain has damaged standing crops and seedlings, while edible oils that the country imports have become expensive.
The high prices are a particular cause of concern for India’s hundreds of millions of poor people, who have already been squeezed by the coronavirus pandemic and its impact on an economy that contracted a record 23.9% in April-June.
Food items such as onions, potatoes, eggs, meat and tomatoes have a nearly 46% weight in India’s retail inflation basket. Food inflation shot up to 11.07% in October, the highest in nine months according to data released on Thursday, sending overall retail inflation surging to 7.61%.
“We were expecting a hefty correction in vegetable prices but just before harvesting, excessive rainfall damaged crops,” said Amol Ghule, a vegetable trader based in the western state of Maharashtra that dominates India’s onion and oilseeds production.
Parts of India’s richest state was battered by untimely rain last month.
“Many farmers are having to prepare seedlings again for planting and this will delay supplies from the new season crop,” Ghule said.
In the past three months, onion prices have more than quadrupled in India, while soyoil prices have rallied 23%.
International prices of edible oils, meanwhile, have hit record highs due to falling stocks. India imports 70% of its edible oil from countries such as Malaysia, Argentina, Indonesia and Ukraine.
Poultry prices are rising as Indians flock to chicken shops for some extra protein during the pandemic, while production is low because many chicken farms were closed due to India’s virus lockdown.
Also, high vegetable prices have made eggs more affordable for many poorer people, said Uddhav Ahire, chairman of poultry supplier Anand Agro Group.
Economists say the government’s extra spending to revitalise the economy could also keep inflation high. This fiscal year ending March 31, the government is likely to overshoot its budgeted spending of $407.80 billion by more than $60 billion.