India’s retail inflation started in June, where some food items and fuel show a price increase. With the increase in the price of goods and services many economists feel pricing pressure and amid lockdown may affect the whole structure of the economy.
Covid19 leads to retail inflation which affected the rural workers, farmers during the Month of June, July. In the case of agricultural labours, it recorded an increase of 1 to 15 points in 17 states and 3 to 8 decrease points in 3 states. Retail inflation for industrial workers has measured 5.06 per cent in June whereas the food inflation measure is 5.49 per cent in June. The maximum CPI increase was experienced in Orissa (7 points and 8 points), it is because of the sudden increase in the price of meat, fish, fresh/dry vegetables, fruits, etc. The maximum decrease regarding Consumer Price Index was experienced by the people in Jammu and Kashmir about –19, -20 respectively. Industrial worker’s retail inflation is measured based on the Consumer Price Index (CPI).
Labour Minister Santosh Gang war arose a statement that all Indian Index for stood at 332 with a rise of 2 points.
Krishnamurthy Subramanian, currently the chief economic advisor has concluded that the retail inflation rate will decrease in the following days. Now the lockdowns were slightly removed in every sector, so it tends to increase the purchasing power of people. He also adds it’s all due to pandemic impact and those supply-side frictions, as when all these local restrictions and lockdowns are removed eventually these frictions will go down and price among goods will decrease. The six-member Monetary Policy Committee (MPC) which is headed by the Reserve bank of India was obliged to maintain the retail inflation rate is 4 per cent till March 31, 2021. Manufacturing sectors reduced 39.3 per cent, construction contracted 50.3 per cent mining output drops 23.3 per cent as well as the electricity and gas of 7% drop.
The Government initiated some policies to cope with the COVID 19 pandemic, but it’s still a kind of herculean task for the poor people in the country to overcome this crisis stated that the inflation rate is expected a reduction of 4% in December. The previous high retail inflation was reported in July 2014 of 7.39%. Let’s hope the pandemic situation ends and the economy gets back to its normal.