Wholesale price index (WPI)-based inflation for April is now above 10%. The Food and Agricultural Organization’s food price index has risen by 31% in one year. How much of India’s WPI inflation, which reflects rising input costs for producers, will be passed on to consumers remains to be seen. Of course, the CPI has a large weight of food items, and a good monsoon, which is quite likely, could result in a bumper crop, possibly arresting food inflation. Thus, as we battle a second covid wave and related lockdowns, we also face the prospect of higher inflation, unemployment and inequality, and lower incomes for most households, especially in rural areas.

Source: Mint May 17, 2021 17:15 UTC