CPI inflation for March shoots up by 6.95%, mainly triggered by costly food products; edible oil prices surge by over 50%

Consumer price-based inflation jumped to 6.95 per cent in March, mainly on account of costlier food items, according to government data released on Tuesday. The Consumer Price Index (CPI)-based inflation was 6.07 per cent in February. 

The inflation in the food basket was 7.68 per cent in March, up from 5.85 per cent in the preceding month. It is for the third straight month that the retail inflation remained above the Reserve Bank of India’s (RBI) comfort zone. The RBI, which mainly factors in the retail inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep the inflation between 2 and 6 per cent.  

Meanwhile, rising prices of edible oil have led to a significant number of Indian households cutting on their consumption. Many others have downgraded the quality of the edible oil consumed, notes a survey of LocalCircles.

The survey had involved 36,000 responses from 359 districts of the country. It also found that 67 per cent of households are paying more for edible oil by dipping into their savings.  

The survey comes after domestic edible oil prices rose by 50-100 per cent in the last 12 months and 25-40 per cent in the last 45 days. During the recent RBI MPC meeting announcements too, Governor Shaktikanta Das had said that the edible oil prices would remain at an elevated level in the near future. “Edible oil price pressures are likely to remain elevated in the near-term due to export restrictions by key producers as well as loss of supply from the Black Sea region,” said the RBI Governor had said.  

In the backdrop of rising edible oil prices, 50 per cent of households stated that they were consuming the same amount but paying more from savings, while 17 per cent said that they swear  consuming the same amount but paying more by cutting down on discretionary spending. This had indicated that 67 per cent were paying more for edible oil prices by reducing savings and spendings. As much as 24 per cent said that they had reduced monthly consumption but were spending the same as before. Some 6 per cent were not aware of the price hike and 3 per cent could not say. 

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