Centre explains rising food prices ahead of Union Budget 2024 | Read in Detail
The Economic Survey 2024: The Economic Survey 2024 highlights that timely interventions by the Central Government, coupled with stability measures by the Reserve Bank of India (RBI), have successfully maintained retail inflation at 5.4% amidst the Covid-19 pandemic and geopolitical tensions.
Finance Minister Nirmala Sitharaman, while presenting the survey in Parliament on Monday, said headline inflation remained "under control" and was projected to be 4.5% in FY25 and 4.1% the following year. However, the government acknowledged that inflation rates for certain food items have risen.
The Economic Survey 2024, providing a comprehensive overview of the current economic landscape, was presented a day before the Finance Minister’s seventh Budget. The survey noted that supply chain disruptions caused by the pandemic and global conflicts had led to increased prices of consumer goods and services in FY22 and FY23. Nonetheless, strategic policy interventions ensured that retail inflation was contained at 5.4% in FY24, marking the lowest level since the pandemic began.
_97ae8b5bad6d21b85c52ca3f9c56cd60_1280X720.webp)
The survey credited the low retail inflation rate to the government's reductions in LPG and fuel prices. Specifically, LPG prices were cut by Rs 200 across India last August, and petrol and diesel prices were reduced by Rs 2 in March this year.
Additionally, the RBI's actions, including a cumulative policy rate hike of 250 basis points between May 2022 and February 2023, effective liquidity management, and consistent market communication, have been instrumental in achieving the current inflation levels. Last month's retail inflation stood at 5.1%.
Core inflation has also declined to a four-year low, according to the survey. Food inflation, however, has increased from 6.6% in FY23 to 7.5% in FY24. The survey attributed this rise to adverse weather conditions, depleted reservoirs, and crop damage, which have affected agricultural output and food prices. Specific factors such as regional crop diseases, early monsoon rains, and logistical disruptions have led to a spike in tomato prices.
Despite these challenges, the survey noted that the Indian economy has recovered and grown in an orderly manner post-pandemic. The government expects economic growth to be between 6.5% and 7% in the current financial year.
- With inputs from agencies
