inflation: Some states have a bigger inflation battle in their hands

Some states are having to bear the brunt of inflation more than others as relentless price rise of everyday-use items continues to run households ragged across the country.

While last week’s data put CPI numbers at a near 8-year high of 7.8 per cent, four states — West Bengal, Madhya Pradesh, Haryana and Telangana — registered inflation of 9 per cent.

In seven other states in the country, inflation for the period under consideration breached 8 per cent, data showed.

These states are probably seeing more price pressures as their supplies have gotten disrupted more because of the Ukraine war, economists have noted.

A few states, though, are not seeing much prices pressures. At the other end of the spectrum, two states — Kerala and Tamil Nadu — saw April inflation at just over 5%.

Noted economist DK Joshi attributed such high inflation in these states to two factors — a) higher penetration of rural economy, and b) the variance in fuel duties, which are likely higher in the states in question.

It is worth noting here that rural inflation, at 8.4 per cent, rose more than urban inflation (7.1 per cent).

This calls for a detailed analysis of the divergence of inflation rates across the country, ToI said quoting Joshi, chief economist at ratings agency

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In India, headline inflation is now at the highest level since May 2014 when it had hit 8.33%.

Just ahead of the April numbers, RBI’s Monetary Policy Committee had raised the benchmark interest rate by 40 bps at an unscheduled meeting with the aim to get a handle on rising inflation. This was India’s first rate raise since August 2018.