Inflation: Some states have a big inflation war in their hands

Some states have to bear the brunt of higher inflation than others as unbridled rising prices of consumer goods continue to plague households across the country.

Four states – West Bengal, Madhya Pradesh, Haryana and Telangana – recorded 9 per cent inflation, while last week’s data put the CPI figure at an 8-year high of 7.8 per cent.

In the other seven states of the country, inflation has exceeded 8 percent for the period under consideration, the data shows.

These states are likely to see further price pressures as their supply is further disrupted by the Ukraine war, economists have noted.

A few states, however, are not seeing too much price pressure. At the other end of the spectrum, two states – Kerala and Tamil Nadu – saw April inflation above just 5%.

Leading economist DK Joshi has attributed such high inflation in these states to two factors – a) higher penetration into rural economy, and b) diversification of fuel tariffs, which is probably higher in the states in question.

It is noteworthy that rural inflation rose to 8.4 per cent, higher than urban inflation (7.1 per cent).

ToI quoted Joshi, chief economist at the rating agency, as saying that it called for a detailed analysis of the spread of inflation across the country.

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In India, headline inflation is now at its highest level since May 2014 when it reached 8.33%.

Just before the April issue, the RBI’s Monetary Policy Committee raised the benchmark interest rate by 40 bps in an unscheduled meeting aimed at curbing rising inflation. This was India’s first rate hike since August 2018.