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This happens
to be the third ECONOMY
consecutive month
when retail inflation
has breached the

in the improvement of crop statistics Reserve Bank of India’s of onion, which witnessed 455.83 per
through supervision of the area enu- cent jump in prices, followed by potato
meration and crop estimation surveys medium-term target at 44.97 per cent.
of the State agencies. It also maintains of 4 per cent. Food Retail inflation, measured as con-
a frame of urban area units for use in sumer price index (CPI), was 5.54 per
sample surveys in urban areas. inflation surged to cent in November and 4.62 per cent in
The NSO has also found that the 14.12 per cent in October last year. This is third consecu-
estimated growth in GVA for the Trade, tive month where retail inflation has
Hotels, Transport and Communication December 2019, as breached the central bank’s medium-
and Services related to Broadcasting against 10.01 per cent term target of 4 per cent. The govern-
services during 2019-20 is placed at 5.9 ment estimates GDP to grow at 5 per
per cent as against growth of 6.9 per in November 2019 cent in financial year 2020, a sharp
cent in the previous year. In financial, drop from the 6.8 per cent recorded in
real estate and professional services, financial year 2019. In the quarter that
the estimated growth in GVA for this monthly wholesale price index (WPI), ended on September 30, 2019, GDP
sector during 2019-20 is placed at 6.4 was recorded at 3.24 per cent in April growth stood at 4.5 per cent.
per cent as compared to growth of 7.4 2019. WPI was at 3.46 per cent during The Reserve Bank of India had kept
per cent in 2018-19. December 2018. its key interest rates unchanged in its
The fact is that a massive rise in food Build up inflation rate in the last monetary policy review in Decem-
prices has pushed India’s retail infla- financial year so far was 2.42 per cent ber 2019, and it is still unclear if they
tion in December to a 65-month high compared to a build up rate of 2.92 per will pause or cut rates in February. The
of 7.35 per cent from 5.54 per cent in cent in the corresponding period of the Monetary Policy Committee (MPC) will
November, while the wholesale price- previous year. next meet from February 4-6.
based inflation shot up to 2.59 per cent The rate of price rise for food articles The Consumer Price Inflation (CPI)
from 0.58 per cent in the same period. rose to 13.12 per cent during December or retail inflation figures, released by
Wholesale prices-based inflation as against 11 per cent a month earlier, the NSO indicate that inflation has
surged to an eight-month high of 2.59 while for non-food articles it rose further jumped from November when
per cent in December, as against 0.58 nearly four-fold to 7.72 per cent from it hit a 40-month high of 5.54 per cent.
per cent in November due to sharp rise 1.93 per cent in November. Among The retail inflation based on Consumer
in prices of food articles like onion and food articles, vegetable prices surged Price Index (CPI) was 2.11 per cent in
potato. The annual inflation, based on by 69.69 per cent, mainly on account December 2018. While core inflation
has increased marginally in December
to 3.7 per cent, the real worry for the
RBI and government is the rate of food
(vegetable) inflation, which is the key
trigger behind the steep rise in infla-
tion in December 2019.
The sharp rise in retail inflation
in December comes as another blow
to the economy at a time when the
government projects it to grow in the
current fiscal at five per cent, which is
the slowest pace of growth in 11 years.
Minister of Consumer Affairs, Food
and Public Distribution, Ram Vilas
Paswan said that of the total 18,000
tonnes of imported onions, only 2,000
has been sold, an indicator that further
strengthens the case for an economy
struggling to meet basic necessities.
This imported onion, the minister
noted, will now be sold at 22 per
kilogram.
LETTERS@TEHELKA.COM

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