Retail Inflation

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: on the spike in retail inflation; its causes and implications

News: Retail inflation soared to a five-and-a-half-year high of 7.35% in December 2019, with the shortage of onions driving the surge.

Background

The last time retail inflation was this high was the 7.39% recorded in July 2014, just after PM Modi began his first term in office.

What led to this spike in retail inflation?

According to information released by the National Statistical Office on Monday, retail inflation based on the Consumer Price Index was only 2.11% in December 2018 and 5.54% in November 2019.

The hike in inflation in the ‘vegetables’ category was at 60.5% last month in comparison to December 2018. Onion prices were above the Rs. 100 per kg mark in many major cities last month, due to a 26% fall in production.

Overall, food inflation rose to 14.12 per cent in December as against a negative rate of -2.65 per cent in the same month of the previous year. It was also significantly higher than the 10.01% recorded in November 2019. Along with vegetables, high prices of pulses, meat and fish also contributed to last month’s spike.

Inflation targeting by the RBI

The Centre has mandated the Reserve Bank of India to keep inflation in the range of 2-6%.

The RBI, which mainly factors in CPI-based inflation, is scheduled to announce its next bi-monthly monetary policy on February 6.

In its December policy, the central bank, which had been reducing rates, had kept the repo rate unchanged citing inflationary concerns.

Source: The Hindu

Join Our Telegram

Tibet’s new law on ethnic unity

Bojjannakonda: Buddhist Site

India’s Indo-Pacific Oceans Initiative (IPOI) – UPSC GS-2 Indo-Pacific Notes

20 Nov, 25
SHARE

India’s Indo-Pacific Oceans Initiative (IPOI) UPSC GS-2 INDO PACIFIC – IR/PSIR IPOI is India’s open, voluntary and non-treaty-based maritime initiative for building a free, open, inclusive and rules-based Indo-Pacific through practical cooperation. Why in News? India’s Indo-Pacific Oceans Initiative has gained renew

AI Impact Summit 2026: IndiaAI Mission, MANAV Vision & Global AI Governance | UPSC GS-3 S&T

19 May, 26
SHARE

AI Impact Summit 2026 UPSC GS-3 S&T PT-MAINS The India-AI Impact Summit 2026 positioned India as a Global South leader by shifting global AI debate from only AI safety and regulation to AI for development, inclusion and real-world impact. Why in News? India hosted the India-AI Impact Summit 2026 at B

Hong Kong Convention for Safe Ship Recycling – IMO Treaty & India’s Ship Recycling Law | UPSC GS-3 Environment

27 Jun, 25
SHARE

Hong Kong Convention for Safe Ship Recycling UPSC GS-3 ENVIRONMENT PT-MAINS The Hong Kong International Convention, 2009 is an IMO treaty that ensures ships are recycled safely without unnecessary risk to human health, worker safety and the environment. Why in News? The Hong Kong Convention entered into force on 26 June 2

LeadIT 2.0: India-Sweden Initiative for Low-Carbon Industry Transition | UPSC GS-2 & GS-3

14 Nov, 23
SHARE

LeadIT 2.0: Leadership Group for Industry Transition UPSC GS-2 IR GS-3 S&T LeadIT 2.0 is the second phase of the India-Sweden-led global initiative to support low-carbon transition in hard-to-abate industrial sectors. Why in News? The second phase of LeadIT was announced at the LeadIT Summit 2023, ho

India-EFTA TEPA: Trade & Economic Partnership Agreement Explained | UPSC GS-2 IR/PSIR

03 Sep, 25
SHARE

India-EFTA Trade and Economic Partnership Agreement UPSC GS-2 IR/PSIR The India-EFTA TEPA is a comprehensive trade pact between India and four non-EU European countries — Iceland, Liechtenstein, Norway and Switzerland — aimed at boosting trade, investment, jobs, services, technology and supply-chain resilience. Wh