7.18 ndian onom
Table 7.3 All India Weights of different Sub-groups within Consumer Food Price Index
Su -Group Su -group Description Rural r an Com ined
Code
(1) (2) (3) (4) (5)
1.1.01 Cereals and products 26.14 22.24 24.77
1.1.02 Meat and fish 9.26 9.23 9.25
1.1.03 Egg 1.05 1.21 1.10
1.1.04 Milk and products 16.34 17.98 16.92
1.1.05 Oils and fats 8.90 9.49 9.11
1.1.06 Fruits 6.10 9.80 7.40
1.1.07 Vegetables 15.78 14.88 15.46
1.1.08 Pulses and products 6.25 5.84 6.11
1.1.09 Sugar and confectionery 3.61 3.28 3.49
1.1.10 Spices 6.57 6.05 6.39
All Sub-groups of CFPI 100.00 100.00 100.00
Source: CSO, February 2015. Here, CPFI stands for Consumer Food Price Index.
trenDs in inflAtion developing economies.48 But it has sporadic
incidences of double-digit tendencies mainly
Inflation has been a highly sensitive issue in
due to supply-side shortfalls caused by droughts
India right since Independence and it has been so
during the ongoing reforms process period, too. It (monsoon failures), price rise of crude oil in the
has an incessant tendency of resulting into ‘double international market or fund diversions due to
digits’, taking politically explosive proportions wars (the Chinese war of 1962 and the Pakistan
like governments falling at the Centre and state wars of 1965–66 and 1971). The decadal inflation
levels due to price rise of the commodities such as in India has been as given below:49
edible oil, onion, potato, etc. In such situations the (i) During 1950s: remained at 1.7 per cent.
government in general has been taking recourse (ii) During 1960s: remained at 6.4 per cent.
to tighter money supply to contain the state level (iii) During 1970s: remained at 9.0 per cent.
disturbances due to price rise of the commodities (iv) During 1980s: remained at 8.0 per cent.
such as edible oil, onion, potato, etc., although it
(v) During 1990s: remained at 9.5 per cent
has contained inflation, but at the cost of higher
(though it reached 0.5 per cent by the
growth. Price rise got rooted in India’s political
psyche in such a way that the government did check fourth quarter of the fiscal 1998–99)
frequent famines quickly at the cost of long-term (vi) During 2000s: Inflation was at lower levels
endemic hunger and sustained malnutrition.47 between 2000–08 (from 3 to 5 per cent).
Decadal inflation in India looks But from 2009 onwards it started moving
comparatively normal with reference to many upward with ‘sttuborn’ tendencies.50
48. Rosser and Rosser, Comparative Economics in a
47. Pranab Bardhan agrees to Amartya Sen (How is India
Transforming World Economy.
oing , New York Review of Books, December 1982)
in A olitical conomy erspective on evelopment 49. Based on Rangarajan, Indian Economy, p. 63; Jalan,
in Bimal Jalan ed. Indian Economy Problems and 50. Ministry of Finance, Economic Survey 2013–14 (New
Prospects, (New Delhi: Penguin Books, 1992), p. 369. Delhi: Government of India, 2014), pp. 75–77.