Rural UP sees over 7% inflation in Jan; Punjab, Manipur witness lower rates

Close to 6% in state's urban areas; Punjab, Manipur have lower inflation rates

Parts of Uttar Pradesh, the whole of Manipur and Punjab are yet to go to the polls. Among these states, while UP had a higher retail price inflation rate than the national average in January, the two other states witnessed lower rates.

In UP, rural areas saw much higher inflation rates than the national rate for such areas. Villages of UP recorded an inflation rate of 7.23 per cent, against the national level of 6.12 per cent. However, urban areas in the state recorded a rate of 5.84 per cent, slightly lower than the national average of 5.91 per cent, showed official data released on Monday.

Overall, the inflation rate in UP was 6.71 per cent, against 6.01 per cent at the all-India level in January. On the other hand, Manipur and Punjab had much lower inflation rates than the national average.

In Punjab, the overall inflation rate was 4.09 per cent, broken up into 4.47 per cent in rural and 3.52 per cent in urban areas. Manipur had just 0.84 per cent inflation in January.

If all states are taken into consideration, three states – Haryana, West Bengal and Telangana – had higher inflation rates than UP in January. Haryana witnessed a 7.23 per cent rate of price rise, West Bengal 7.11 per cent, and Telangana 6.72 per cent. 

These three states are run by three different parties — the Bharatiya Janata Party, the Trinamool Congress, and the Telangana Rashtra Samithi. This shows that high inflation may be due to state-specific issues.

Generally, people are bothered about price movement of items in the immediate past, but if we consider a longer period, the picture on inflation changes a lot. For instance, the inflation rate was not low in Manipur in March 2021. It stood at 5.5 per cent, against the all-India level of 5.52 per cent.

Similarly, UP had quite a low inflation rate in January 2021 at 2.06 per cent, almost half the 4.06 per cent at the all-India level.

Punjab had an inflation rate of 6.28 per cent in June 2021, which was a tad higher than the national average of 6.26 per cent. In the next four months, Punjab saw an inflation rate that was much higher than the all-India level.

The question that arises when non-economic issues such as the Hijab controversy, which emanated in Karnataka that is not poll-bound, divided the polity in the poll-bound states such as Uttar Pradesh, does inflation play any part in deciding the verdict?

No, says Madan Sabnavis, chief economist of the Bank of Baroda.

“State elections have shown in the past that macroeconomic factors may not really matter and there would be other issues which influence the voting patterns. Therefore, religion and caste play a more important role. Something like inflation, which is generalised, may not matter at the time of voting,” he said.

Sabnavis said prices of individual commodities like onions have admittedly brought down governments in the 1970s and ’90s, but that is commodity specific.

For instance, skyrocketing onion prices drove the Congress to power in the Delhi Assembly elections in 1998, ousting the BJP government.

He said people identify with local issues more like any new social facility or scheme that involves largesse of the state, which works better.

“That’s why several states follow policies like free cycles, sewing machines, heavily subsidised meals, which click with the voters,” Sabnavis pointed out.

For instance, among two main parties in UP, BJP promised free electricity to farmers for irrigation, while Samajwadi Party assured electorate of two LPG cylinders every year to below poverty line (BPL) families, one litre of petrol to all two-wheeler owners, three litres of petrol and six kg of CNG per month to auto-rickshaw drivers.

While Manipur will go to polls on February 28 and March 5, Punjab is scheduled to vote on February 20. UP has already seen voting for two phases on February 10 and 14. The next five phases are spread from February 20 and March 7. The results will be declared on March 10. 

SP promises 1 kg 'ghee', free ration to poor for 5 years

Addressing an election rally in Rae Bareli, Samajwadi Party chief Akhilesh Yadav on Tuesday promised 1 kg of 'ghee' to the poor along with free ration for five years if his party came to power in Uttar Pradesh, while claiming that the Bharatiya Janata Party (BJP) government was set to discontinue its own free-ration scheme. "The poor, who are availing their rations, will get it till the elections. It will not be available after the elections. Earlier it was to be given till November but when the UP elections were announced, they said they would get it till March," Yadav said.