Retail inflation in India hit a 15-month high of 7.44% in July due to an overall increase in food prices.
Rising inflation in recent months, driven by soaring vegetable prices, has put considerable pressure on households. If that wasn't enough, there's a bigger threat lurking:
cereal shortages, especially rice and wheat.
grain crisis
Over the past few weeks, government officials have been scrambling to come up with new measures to increase domestic wheat supplies to cool domestic prices, which hit a six-month high last week.
India banned wheat exports last year after a sudden rise in temperatures affected production. At that time, export demand was also booming due to the global deficit caused by the Russia-Ukraine conflict. Despite the export ban, wheat prices continued to rise.
Industry and trade officials say even this year's wheat production is below government estimates of a record 112.74 million tonnes.
Not just wheat
It's not just wheat prices that have risen sharply in recent months. Rice prices also increased due to a production shortage. This led the country to ban the export of non-basmati rice, causing shortages and a global crisis.
While India's move may upset the world's major wheat and rice importers, New Delhi's sole objective remains to reduce prices of essential food items to support its large population. , many of them earn less than 250 rupees per day.
Why is the government concerned?
Prime Minister Narendra Modi, in his Independence Day speech, said India had taken some steps to control inflation and was in a better position than most other developed countries, but also added a word of caution. warning.
"India has gone to great lengths to control inflation... We cannot be satisfied just because our circumstances are better than the rest of the world. I need to take more measures to put the burden of inflation on my people's shoulders. We will take these steps and my efforts will continue,” PM Modi said.
His statement came just a day after India's retail inflation hit a 15-month high of 7.44%, largely driven by food prices.
Economists and the Reserve Bank of India (RBI) expect inflation to continue at high levels over the next two months due to the effects of erratic weather and El Nino on agricultural production. This could worry the ruling BJP-led NDA government, with a general election coming up in 2024. In addition, several important state parliamentary elections are also coming up and the BJP wants it. maintain power in some great hearts. Statuses.
Historically, rising inflation has often been such a big deal that even governments have to take the throne. In fact, even a moderate rise in food inflation that accounts for almost half a basket of overall consumer prices is known to worry voters – this could be used by opposition parties to attack politics. ruling government.
Not only corruption but persistently high inflation led to the collapse of the Congress-led coalition government in 2014, paving the way for the BJP-led NDA to come to power.
