The new CPI series shows that rural India faces higher inflation pressures
The latest series of consumer price indices (CPIs) released by the Central Statistics Office (CSO) keep 2010 as the base year and are available for all states for rural and urban areas separately. Even as this is a vast improvement on the previous CPIs that have outdated base years and lag in release of data, annual inflation data will be released in January 2012. Despite the lack of time series, these estimates give a reasonable picture of the current inflation situation across the country. The latest provisional data for July shows the CPI at 110.4, with 2010 as the base year at 100. Rural India has seen higher inflation pressures compared to urban India — the CPI rural is estimated at 111.6 in July, 2.7 percentage points higher than the index in urban areas.
For almost all commodity groups – barring clothing, bedding and footwear – the index value in rural areas is higher than that in urban areas. The highest index value in rural areas is in the group of fuel and light, making it the strongest pressure point in this series. For July, the CPI in rural areas for fuel and light stands provisionally at 117.3, significantly higher than in urban areas where the index stood at 112.8. In urban areas, the highest index value is seen in case of clothing, bedding and footwear, while food, beverages and tobacco take the third spot. In July, the CPI for food, beverages and tobacco in rural areas was estimated at 110.6, while in urban areas it was 109.8. (Click here for graph)
| PRICE PRESSURES Consumer price indices (Base: 2010=100) July 2011 provisional | ||
| Commodities | Rural | Urban |
| Food, beverages and tobacco | 110.6 | 109.8 |
| Fuel and light | 117.3 | 112.8 |
| Clothing, bedding and footwear | 116.3 | 116.5 |
| Housing | 106.9 | |
| Miscellaneous | 110.7 | 107.1 |
| General index (All groups) | 111.6 | 108.9 |
| Source: CSO | ||
A look at the state-wise CPIs shows that Meghalaya, West Bengal and Gujarat top the table for rural price indices in July, while Delhi, Nagaland and Chandigarh have the lowest estimated rural CPIs. In most of the states, the index values of rural areas are higher than that of urban areas, notable exceptions among the big states being Punjab, Uttarakand, Himachal Pradesh and Jammu & Kashmir. Urban indices are the highest in Andaman and Nicobar Islands, Kerala and Mizoram and lowest in Manipur, Goa and Nagaland. From May to July, the highest increase in rural indices has been in Meghalaya, Goa, Sikkim and West Bengal, each seeing more than a 3.5 per cent rise, while the lowest increase has been in Jammu and Kashmir and Dadra and Nagar Haveli, with Mizoram seeing a marginal decline in the rural CPI. When it comes to urban CPIs, six states have seen a rise of more than 4.5 per cent over the same period — Bihar, Jharkhand, Chandigarh, Sikkim, Chhattisgarh and Karnataka. A less than three per cent rise was estimated for three states — Tripura, Nagaland and Daman and Diu.
As noted at the beginning, the new CPI series presents a snapshot in time across states. Despite the lack of year-on-year inflation estimates, even at this juncture there is useful information on the price pressures in the groups of commodities across rural and urban areas for all the regions.
Indian States Development Scorecard is a weekly feature by Indicus Analytics that focuses on the progress in India and the states across various socio-economic parameters
sumita@indicus.net
This is the last report in the current series. The Scorecard will resume on November 3
