Highest Retail Inflation in 3 years, Vegetable Prices Rise by 10%
Video Editors: Sandeep Suman and Mohd Ibrahim
Economic Slowdown, unemployment, the auto sector, the real estate sector and the manufacturing sector in constant flux...
Only inflation rates brought relief to common folk until bad news arrived on that front as well. Retail prices are at the highest in 3 years. The government body which keeps track of numbers of Central Statistical Office has released the inflation rates for November, indicating an increase from 4.62 percent to 5.54 percent.
This, however, is not the end. Recession is still a source of much despair, Industrial Production Index (IIP) is still negative and the problem is that it’s directly related to employment. Inflation means more expenditure and unemployment means empty pockets.
Increased food prices have contributed the most to inflation, crossing 10 percent in November and thus, accounting for about half of the total retail inflation.
RBI’s medium-term target of inflation is 4 percent. After July 2018, retail inflation crossed the same for the first time in October this year and now, in November, inflation has touched a new level.
Recently, onions made headlines. In some areas of the country, prices of onions have increased to over Rs 150. In November, the prices of vegetables increased by 10 percent. In October, inflation on vegetables was around 26 percent, and now, it has increased to 36 percent.
Earlier, the RBI under its monetary policy, raised the inflation estimate and that's why it did not reduce the interest rate. The expectation of ease of debt shattered. Now that inflation has increased more than the RBI’s estimate, expectations of low interest have been shattered as well.
Though IIP has improved slightly it is still negative. IIP was -5.4 percent in September, and has now reached -3.8 percent. This is prompting fear as, if the production sector is in negative, it will negatively impact the economy and prolong the recession.
If we believe in what RBI and some independent growth analysts posit, growth may not pick up anytime soon. The Central Bank had lowered its forecast of economic growth for the financial year 2020 from 6.1 percent to 5 percent. The government stated that growth rate in the second quarter was just 4.5 percent. Now, according to the rating agency Nomura, India's GDP growth is going to be 4.3 percent in the December quarter, which means the decline in growth will continue.
And, if growth is low, it means less employment and thus, less money in our pockets.