The Fact News Service
New Delhi, July 16
In June, food inflation surged significantly, lifting the overall Consumer Price Index (CPI) inflation to 5.1 percent, up from 4.8 percent in May.
According to the CRISIL report, the increase in food prices, particularly vegetables, cereals, milk, and fruits, has been a significant contributor to this uptick.
Despite a supportive base effect from last year, food inflation soared to 9.4 percent, driven primarily by the persistently high prices of vegetables, which have remained in double digits for eight months.
Vegetable inflation remains a major concern, reaching 29.3 percent in June, up from 27.4 percent in May. The increase was broad-based, affecting both TOP (tomatoes, onions, potatoes) and non-TOP vegetables.
TOP inflation surged to 48.4 percent, led by onions (58.5 percent vs. 38.1 percent) and potatoes (57.6 percent vs. 55.3 percent). Despite an on-month uptick in prices, tomato inflation eased to 26.4 percent from 41.3 percent, owing to the high base of last year.
Non-TOP vegetables saw inflation harden to 19.7 percent from 18.8 percent, driven by leafy vegetables, brinjal, lady’s finger, and pumpkin.
Foodgrain inflation remained rigid at 10.2 percent, though slightly lower than the previous month. Cereals inflation inched up to 8.8 percent from 8.7 percent, mainly due to non-PDS wheat (6.7 percent vs. 6.5 percent).
Pulses inflation eased slightly to 16.1 percent from 17.1 percent, with arhar dal inflation declining sharply to 26.9 percent from 32.1 percent, while other pulses such as masur (0.9 percent vs. -0.1 percent) and split gram (18.5 percent vs. 14.8 percent) saw a rise.
Milk inflation rose for the first time in 13 months due to a price hike by major producers (3 percent vs. 2.6 percent). Edible oils inflation continued to log lower disinflation for the fifth consecutive month (-2.7 percent vs. -6.7 percent).
Spice inflation softened for the 10th straight month to 2.1 percent from 4.3 percent.Fuel prices fell by 3.7 percent year-on-year in June, remaining in deflation for the 10th consecutive month.
The decline was primarily due to global oil prices being under pressure and government subsidies for LPG, which kept fuel inflation negative. Prices of liquefied petroleum continued to deflate in June (-24.8 percent).
Electricity inflation moderated to 8.8 percent from 10.9 percent, owing to a supportive base, while inflation in firewood and woodchips inched up to 2.7 percent from 2.6 percent.
Non-food inflation eased for the 17th straight month, sliding to a record low of 2.3 percent. Core inflation, the dominant part of non-food inflation, remained unchanged at a record low of 3.1 percent.
Services inflation eased by 10 bps to a record low of 2.9 percent, while core goods inflation was steady at 3.2 percent. Personal care and effects saw inflation harden to 8.2 percent from 7.7 percent, with gold prices rising 19.7 percent (vs. 18.2 percent in May).
Inflation in education slid to 3.6 percent from 4.1 percent, driven by softer inflation in tuition fees (3.9 percent vs. 4.3 percent).
Rural inflation rose to 9.2 percent from 8.6 percent, while urban inflation was relatively stickier, rising by 20 bps to 8.8 percent. Fuel inflation was lower in rural areas (-0.8 percent) compared to urban (-7.7 percent), and core inflation was higher in rural areas (3.3 percent vs. 3 percent). Thus, rural residents faced a higher inflation burden than their urban counterparts across income classes.
