Tracking 'sticky' food prices important for MPC, says RBI paper

The compiled dataset comprises 1.3 million price data points covering 45 food items on a weekly basis across 85 centres in the country for the period 2005-18.

Food prices in India are showing varying degrees of price stickiness, according to a Reserve Bank of India (RBI) study, which suggested that paying attention to the sticky component of food inflation — besides core inflation — is important for the conduct of monetary policy.
 
The paper looked at the price setting behaviour in the food sector in India using a novel micro-level dataset.
 
The stickiness in food prices has relevance for policy in India as food accounts for about 46 per cent in overall consumer price index (CPI), the highest among inflation-targeting countries.
 
Therefore, the risk