Food Prices Land Retail Inflation at 5 Year High, Opposition Leaders React
Retail inflation jumped sharply to 7.35 per cent in December 2019, surpassing the RBI's comfort level, mainly due to high food prices, government data showed on Monday. This is third consecutive month that retail inflation has breached the central bank’s medium-term target of 4 percent.
Retail inflation rose to about five-and-half year high of 7.35 per cent in December 2019, surpassing the RBI's comfort level, mainly due to spiralling prices of vegetables as onions were selling costlier.
As per the data released by National Statistical Office (NSO) on Monday, the spike in inflation in the vegetable segment was 60.5 per cent during the month compared to December 2018.
The overall retail inflation based on Consumer Price Index (CPI) was 2.11 per cent in December 2018 and 5.54 per cent in November 2019.
As per the data released by the NSO, the overall food inflation rose to 14.12 per cent in December as against (-) 2.65 per cent in the same month of 2018. The food inflation was 10.01 per cent in November 2019.
The previous high in retail inflation was witnessed at 7.39 per cent in July 2014, the year Narendra Modi-led government assumed office for the first term.
The inflation in 'pulses and products' was recorded at 15.44 per cent, while in case of 'meat and fish' it was nearly 10 per cent.
The central government has mandated the Reserve Bank of India to keep inflation in the range of 4 per cent with a margin of 2 per cent on the either side.
The RBI, which mainly factors in the CPI based inflation, is scheduled to announce its next bi-monthly monetary policy on February 6. In its December policy, the central bank, which had been reducing rates, had kept the repo rate unchanged citing inflationary concerns.
Congress General Secretary Priyanka Gandhi Vadra on Tuesday hit out at the government over spiralling prices of vegetables and essential commodities which is hitting the poor.
The Congress leader's comments come a day after data showed that retail inflation rose to about five-and-half year high of 7.35 per cent in December 2019, surpassing the RBI's comfort level, mainly due to spiralling prices of vegetables as onions were selling costlier.
Priyanka Gandhi accused the government of picking pockets of the common man and also taking away their livelihood.
"The prices of vegetables and other edible commodities is getting out of reach of the common man. What will the poor eat when vegetables, oil, pulses and flour turns expensive. The poor are not even getting employment due to the economic recession. The BJP government has not just picked the pockets of the poor but also kicked on their stomach," she said in a tweet in Hindi.
Simultaneously, senior Congress leader P Chidambaram on Tuesday attacked the Modi government over the state of the economy. He said, if unemployment rises and incomes decline, there is a danger of youth and students "exploding in anger". Chidambaram also attacked the government over the rising consumer price index (CPI) inflation.
"The nation is engrossed with the anti-CAA, anti-NPR protests. Both present a clear and present danger," Chidambaram said.
The sliding economy is an even greater threat to the country, the former finance minister said in a series of tweets.
The nation is engrossed with the anti-CAA, anti-NPR protests. Both present a clear and present danger.— P. Chidambaram (@PChidambaram_IN) January 14, 2020
The sliding economy is an even greater threat to the country. If unemployment rises and incomes decline, there is the danger of youth and students exploding in anger.
"If unemployment rises and incomes decline, there is the danger of youth and students exploding in anger," he said.
"The circle of incompetent management is complete. Mr Narendra Modi's government started in July 2014 with CPI inflation at 7.39 per cent. In December 2019, it was 7.35 per cent," Chidambaram said.
"Food inflation stands at 14.12 per cent. Vegetable prices are up 60 per cent. Onion prices are over Rs 100 per kg. This is the 'achhe din' promised by the BJP," he said.