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Price Difference : Lower in UP, higher prices in Rajasthan? Know why there is a difference in inflation in different states

Photo:FILE UP Raj Price

Highlights

  • Local tariffs and supply chain issues create discrepancies in consumer prices
  • CPI-based inflation rate in June stood at 10.5% in Telangana while 4.7% in Bihar
  • Transport costs, different tax policies of state governments and supply chain differences

Price Difference: Before the implementation of GST, experts used to advocate it by saying that after the implementation of GST, ‘One Nation One Rate’ means that there will be uniform prices across the country. But even five years after the implementation of the GST, retail inflation in India varies substantially across states. Everyone wants to know whether the claim of the government or experts to have the same price is wrong or there is some other screw behind it. Let us know what makes such a difference in the prices of UP, MP or other states.

What is the reason for the difference in prices

The difference in prices is because local tariffs and supply chain issues create differences in consumer prices. The Consumer Price Index (CPI) based inflation rate for the month of June stood at 10.5 per cent in Telangana while it was only 4.7 per cent in Bihar. Its national average was 7.01 percent. Experts believe that this variation in inflation between states can be attributed to factors such as transportation costs, different tax policies of state governments and efficiency of the supply chain.

Inflation above 8 percent in these states

According to the latest CPI data, inflation in some states including Andhra Pradesh and Haryana remained above eight per cent. States with higher inflation than the national average included Assam, Gujarat, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and West Bengal. Inflation in the Union Territory of Jammu and Kashmir was also at 7.2 per cent. Inflation in Uttarakhand, Uttar Pradesh, Punjab, Karnataka, Jharkhand and Chhattisgarh was below the national average in the month of June. In Tamil Nadu, Delhi, Himachal Pradesh and Kerala, retail inflation was less than 6 per cent.

Diesel accounts for 60 percent of the transportation cost

All India Confederation of Goods Vehicle Owners Association general secretary Rajinder Singh said that diesel accounts for 40-60 per cent of the transportation cost. In such a situation, high diesel prices have a direct effect on the prices of consumer goods. “Toll is another important factor in determining the transportation cost. The higher the number of toll plazas on a route, the higher will be the cost of supply.” He said that for transporting perishable items like vegetables, vehicle owners charge both sides fare while for long distances only. One-way fare is charged only.

difference in petroleum prices

SP Sharma, chief economist, PHD Chamber of Commerce and Industry, said that the variation between states in inflation is fundamentally linked to the different economic dynamics of the states and the specifics of the policy environment. Sharma said, “In some states, due to variation in the duty levied on petroleum products, more pressure is being seen on the prices. Due to the difference in fuel duty between states, the effect of fuel prices on inflation of states also varies.

impact of rural inflation

Another important point is that the rural inflation differential between states is large and is generally higher than urban inflation in almost all states. Vinod Anand, general secretary of the Federation of Non-Governmental Organizations of Rural India (CNRI) and member of the recently constituted MSP committee, said the variation in inflation also depends on the cost of living in the states, which is determined by the leadership and policies of the state government. it occurs. Apart from this, efficiency of Public Distribution System (PDS) is also one of the possible reasons.

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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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