n lation and         siness      le     7.19
              Between 2009–13, the headline inflation                       consumer food price index (CFPI) at 4.2
              remained stuck at uncomfortable levels,                       per cent in 2016-17 (from 4.9 per cent in
              primarily due to ‘food articles’ (food                        2015-16 and 6.4 per cent in 2014-15).
              inflation) led by protein-rich items                          It was 1.2 per cent for 2017-18 (upto
              (protein inflation) in the consequence of                     December) and 5 per cent for December,
              shift in dietary habit, income effect (via                    2017. Major drivers of this decline have
              MGNREGA kind of schemes), increased                           been meat and fish, oil and fats, spices,
              wages, increase in prices of commodities                      pulses. Wholesale food price index (WPFI)
              in the global market (especially, food                        also declined to 2.3 per cent in 2017-18
              articles), costlier fodder, costlier energy                   (upto December) as compared to 6.3 per
              and fuel, etc. By late 2010, India had                        cent in 2016-17 (upto December).
              the phenomenon of ‘skewflation’ with                          Core Inflation: While significant
              inflation being in the range of 9–10 per                      moderation has been witnessed in the
              cent.                                                         headline and food inflation, the CPI
       (vii) During 2010s: From 2010–11 to 2013–                            based core inflation (excluding food
              14 inflation remained higher—the                              and fuel groups) remained above 4 per
              average inflation at WPI and CPI was 8                        cent during the last four financial years.
              per cent and 9.7 per cent, respectively.                      However, it fell down to 4.5 per cent in
              Food inflation, led by protein items,                         2017-18 (upto December) from 4.8 per
              breached into double digit51. Since mid-                      cent of 2016-17 (upto December)—by
              2014 inflation started moderating—WPI                         December, 2017 it was at 5.2 per cent.
              inflation remained in negative (-5.1 per                  An analysis of inflationary trends in India
              cent by August 2015) and CPI inflation              does not pin-point any one reason behind it.
              positive of 4.9 per cent end-December               Economists have pointed out all possible reasons
              2016)—showing a ‘wedge’ of 10 per cent.             (the so-called ‘good’ and ‘bad’) behind the
         Current trends in inflation has been as given            inflationary pressures in the economy of which we
     below, as per the Economic Survey 2017-18:                   may have a brief review:
             CPI-C (Headline Inflation): The CPI-C                1. Structural Inflation
             (CPI-Combined) inflation declined to
             4.5 per cent in 2016-17 from 4.9 per cent            With few exceptional years, India has been
             in 2015-16 and 5.9 per cent in 2014-15.              facing the typical problem of bottleneck inflation
             It was at 3.3 per cent for 2017-18 (upto             (i.e., structural inflation) which arises out of
             December) below the threshold of 4 per               shortfalls in the supply of goods, a general crisis
             cent. It was 5.2 per cent for December,              of a developing economy, rising demand but lack
             2017 (as compared to 4.9 per cent of                 of investible capital to produce the required level
             November, 2017 and 3.4 per cent in                   of goods.52 Whenever the government managed
             December, 2016).                                     to go for higher growths by managing higher
                                                                  investible capital it had inflationary pressures
             Food Inflation: Good agricultural
                                                                  on the economy (seen during 1970s and 1980s,
             production and regular price monitoring
             by the Government helped to contain                    52.    esai, eghnad, evelopment erspectives in . .
                                                                          Ahluwalia and I.M.D. Little, (eds), India’s Economic
      51.   Ministry of Finance, Economic Survey 2014–15 (New             Reforms and Development, (New Delhi: Oxford
            Delhi: Government of India, 2015), Vol. 2, pp. 69–75.         University Press, 1998), p. 41.