Telangana tops inflation charts at 8.32%

Telangana, along with West Bengal (8.06%) and Sikkim (8.01%), report rates well above the nation’s 6.8%

India’s retail inflation has been a bugbear for the economy since it surged past 6% in January, but there are wide disparities in the pace of price rise experienced by consumers across the country, with a dozen States clocking an average inflation of less than 6% and another 12 States averaging over 7% through 2022 so far.  

While headline inflation measured by the Consumer Price Index has averaged 6.8% in the first seven months of 2022, well above the 6% upper tolerance threshold set by policy makers, retail prices in States like Kerala (4.8%), Tamil Nadu (5.01%), Punjab (5.35%), Delhi (5.56%), and Karnataka (5.84%) have been rising at less than 6%. Smaller States like Manipur, Goa and Meghalaya have had an average inflation of less than 4% through this period, at 1.07%, 3.66%, and 3.84%, respectively.   

As many as 14 States, along with the erstwhile State of Jammu & Kashmir, have witnessed price rise higher than the national average through 2022, with all but two of these States seeing higher than 7% inflation. Consumers in Telangana, West Bengal and Sikkim faced the steepest spike in prices, with their combined retail inflation for rural and urban areas averaging 8.32%, 8.06%, and 8.01%, respectively. 

Some of the other major States where inflation has stayed sharply elevated include Maharashtra and Haryana (7.7%), Madhya Pradesh (7.52%), Assam (7.37%), Uttar Pradesh (7.27%), Gujarat and J&K (7.2%), as well as Rajasthan (7.1%). 

“The variation in the States’ inflation rates is mainly on account of two factors,” said Madan Sabnavis, chief economist at Bank of Baroda. “One is food prices, where non-producing States have higher inflation as transport prices get added. Second is that some States lowered fuel prices while others didn’t, which also made a difference,” he said.   

Moreover, States that have more rural areas than urban areas face a higher inflation as the rural segment of the Consumer Price Index has a higher weightage for food costs, Mr. Sabnavis pointed out. 

Arunachal Pradesh, for which only a rural consumer price index is calculated by the National Statistical Office, has averaged 7.3% inflation this year, peaking at 9.2% in April when the headline retail inflation for the country had hit a 95-month high of 7.79%.