Retail Inflation: At 9.7%, Rajasthan Records Highest Retail Inflation In July | Jaipur News
Rajasthan had the highest retail inflation in July at 9.7% followed by Jharkhand at 9.2%. Economists and consumer protection bodies in the state attributed the surge to supply disruptions of vegetables, election-time spending and low base effect.
“Rains have damaged vegetable crops, creating supply disruptions. It’s just not tomato prices, most of the vegetables, including ginger, became dearer in the past couple of months,” said prof. ND Mathur, dean of Jaipur School of Economics.
He said that the dry spell in August is not good for the vegetable crops. “It is unlikely the prices will come down to normal levels in coming months given the deficient in rains,” added Mathur.
The short supply was compounded by more liquidity in the state due to the assembly elections. Mathur said, “When there is extra cash in the hands of people, the prices of things tend to go up. In election time, more cash flows into the hands of people, creating demand.”
In fact, the law ministry raised the maximum poll spending limit for candidates to Rs 40 lakh from Rs 28 lakh for assembly elections. Mathur said spending by the candidates will have an upward impact on retail inflation.
Also, because of welfare measures, more money has gone into the hands of people. Through the inflation relief camps, the state government has given subsidies on cooking gas, electricity, health insurance, and treatments in hospitals, among others.
In July, rural retail inflation measured in consumer price index rose to 9.30% from 5.11%, while urban inflation rose to 10.90% from 5% in June. The National Statistical Office reported 37.43% of retail inflation in vegetables and 13% in cereals and products.
