INSUBCONTINENT EXCLUSIVE:
The retail inflation in December was 2.19 per cent, lowest in 18 months.Inflation seems to have now become a double-edged sword
As retail and wholesale inflation continues to be at multi-month lows mainly driven by depressed price of food items, it has now started to
Priti Deshmukh, a consumer who lives in Mumbai's Dadar area, with her two kids and husband, is relieved as she is able to now buy more
We are here because of them
fallen in last couple of months
For exmaple, onion prices have gone down from Rs 70/kg to Rs 20/kgtomatoes have gone done from Rs 80/kg to Rs 40/kggreen peas from Rs 60/kg
to Rs 25-30/kg.The more vegetables Ms Deshmukh buys, more nutrients she feels her family is getting and all because prices of vegetables
have fallen in last couple of months.The retail inflation in December was 2.19 per cent, lowest in 18 months
This translates into welcome news for an average household as it means lower expenditure on essentials
It also raises hope that RBI (Reserve Bank of India) would cut interest rates, which would result in loans getting cheaper in a boost to
economy.However, it could just mean agrarian crisis intensifying
Mr Govari, who grows leafy vegetables in his one-acre field explains how input cost of fertilsers, pesticides, labour costs, transport costs
increases every year but his output cost is going down
For example, fertiliser which used to cost us Rs 800 per 50 kg has now gone up to Rs 1,300 per 50 kg
The cost of pesticides has also gone up
And after this, we don't even get any good selling price," said Mr Govari.India is currently witnessing a low inflation period but lowering
food prices mean weakening rural incomes and rural demand
While government promised to double farmers' income, disinflation in food prices is now putting pressure on farmers across country
And in long run, low food inflation would not only impact rural consumption but also overall economic growth.
