Monsoon & Food Inflation in India
Why in News?
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Monsoon & Food Inflation in India, India has recently witnessed a rise in food inflation, largely influenced by erratic monsoon patterns and climatic disturbances, particularly in 2023 and early 2024. The Reserve Bank of India (RBI) and policymakers are closely monitoring the situation due to its implications on monetary policy and household consumption.
Important Key Points:
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Link Between Monsoon and Food Inflation:
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India’s agriculture is heavily dependent on the southwest monsoon, which affects crop yields and supply.
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Deficient or uneven rainfall disrupts the sowing and harvesting cycles, leading to supply-side shocks.
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Current Trends in Food Inflation:
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Prices of essential food items like vegetables, cereals, pulses, and spices have surged.
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The Consumer Food Price Index (CFPI) has recorded notable spikes, especially during monsoon-related disruptions.
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Major Contributing Factors:
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Climate change and extreme weather events (e.g., floods, droughts, unseasonal rains).
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Supply chain issues, including transportation hurdles during rainy seasons.
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Global factors such as the El Niño effect, which influences rainfall patterns.
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Government Measures:
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Strategic release of food stocks from buffer inventories.
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Import adjustments and ban/export restrictions on certain food items to stabilize prices.
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Promotion of climate-resilient crops and irrigation reforms under schemes like PMKSY.
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Economic Implications:
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High food inflation impacts overall retail inflation, affecting the RBI’s inflation targeting.
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Hurts low-income households the most, reducing disposable income and consumption.
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