On April 13, 2020 The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation has estimated retail inflation rate, to a 4-month low of 5.91% for March 2020 which is lower than 6.58% in February 2020, due to easing prices of kitchen essentials such as vegetables, eggs and meat & is measured by All India Inflation Rates based on Consumer Price Index (CPI) and Consumer Food Price Index (CFPI).
- The retail inflation rate was 2.86% in March 2019, 5.54% in November 2019 & was over 6% since December 2019 & in the case of the urban area, it was 5.66% and in rural it was 6.09%.
Major Inflation rates of March 2020 with February 2020
i.The food basket rate was 8.76% in March, lower from 10.81 per cent in February.
ii.The eggs rate was 5.56% during March as compared to 7.28% in February
iii.The rate of price rise in vegetables was 18.63% as against 31.61% in February. The rate was also slower in fruit prices as well as pulses and related products & the inflation in milk and products was slightly higher in March over February.
iv.The fuel and light segment rate was high to 6.59% in March in comparison to 6.36% in February.
v.The pulses rate came down to 15.85% in March from 16.61% in February. The experts state that the trend is likely to shift to higher rates in the coming month as prices at the time of the lock-up have increased, especially for pulses.
- If there is no normal monsoon and no major foreign or policy shocks in 2021-22, structural model estimates suggest inflation is likely to move in the 3.6-3.8% range.
- With the inflation rate set at 2 to 6% , it is expected that the Monetary Policy Committee will further reduce the policy rate. In February the rate was reduced by 75 basis points (100 basis points to 1 percentage point).
- The government has asked the Reserve Bank to control inflation at 4%, with a 2% difference on both sides & retail inflation was over 6% since December 2019.
Normally, the index is prepared by weekly collected price data collected from selected 1,114 urban markets & 1,181 villages by the National Statistical Organization (NSO), but due to lockdown the fieldwork for price collection was suspended with effect from March 19, 2020 and about 66% of price quotations were received & to assess the price behaviour of remaining price quotations, NSO follows well established and internationally accepted methodology and practices.
What is Retail Inflation?
It is the increase in price of goods sold at the retail market & increase in inelastic goods is the cause of retail inflation.
What is CPI?
It is a measure of the aggregate price level in an economy, consisting of a set of commonly purchased goods and services & measures the purchasing power of a country’s currency and the price level of a basket of goods and services.
What is CFPI?
It is a measure of change in retail prices of food items which is consumed by a defined population group in a given area with reference to a base year.
About Ministry of Statistics and Programme Implementation
Minister of State– Rao Inderjit Singh (Independent Charge)