Business

Inflation sky high!

New Delhi, There has been a big increase of about one percent in the retail inflation rate in a month. In the first data that came after the Reserve Bank’s decision to increase policy interest rates to control inflation, the government has told that the retail inflation rate has increased to 7.79 percent in the month of April. Retail inflation stood at 6.95 per cent in the month of March. In this way, there has been an increase of about one percent in a month. Retail inflation has skyrocketed due to the steep rise in food prices. Wholesale inflation is already in double digits.

According to the data released on Thursday, the inflation of food items has reached 8.38 percent. Since food items constitute almost half of the basket of the Retail Price Index (CPI), the effect of increase in the prices of these items is visible on the inflation rate. After eight years, the rate of retail inflation has become so high. Earlier, in the last month of the UPA government i.e. in May 2014, the retail inflation rate was 8.32 percent. Since then it has been decreasing continuously. But in April 2022 it has reached 7.79 percent.

This is the fourth consecutive month that the inflation rate is above the maximum limit set by the Reserve Bank of India, RBI. RBI has fixed the rate of inflation at 4 per cent and has kept a margin of 2 per cent in it. That is, the inflation rate cannot exceed a maximum of six percent. But the inflation rate has been above this limit since January. Retail inflation, which was 6.01 per cent in January, rose to 6.07 per cent in February. It was recorded at 6.95 per cent in March and has increased to 7.79 per cent in April.

On a year-on-year basis, retail inflation has increased by more than 3.5 per cent. A year ago, in April 2021, the retail inflation rate was 4.23 percent. It is believed that due to the increase in the prices of petroleum products, inflation has been affected. To control this, the Reserve Bank recently raised interest rates by holding an emergency meeting. It is being told that in the bi-monthly monetary review to be held next month, the Reserve Bank may increase the interest rate further.

However, the Reserve Bank in its first Monetary Review Committee meeting of this financial year had raised the inflation forecast in April. It had projected the inflation rate to be 6.3 per cent in the first quarter. According to him, inflation will be 5 percent in the second quarter, 5.4 percent in the third and 5.1 percent in the fourth. It will now have to revise this estimate as the average inflation rate has risen above 7 per cent in the first two months of the first quarter.

Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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