New Delhi, Dec 27 (PTI) Rising prices of edible oil, fuel and several other commodities have weighed heavily on the pockets of consumers this year, but some relief is expected on the inflation front in the coming months.
The economy, shaken by the devastating aftershocks of the second wave of the coronavirus, is now on a revival path, but the recovery is in danger of being derailed after the virus’s new form, Omicron, emerged.
The year 2021 has been poor for consumers, apart from rising prices, people faced loss in income, employment and business losses. The prices of commodities (manufactured or processed), transportation and cooking gas, vegetables-fruits, pulses and other commodities increased due to costlier raw materials. However, the good thing is that there is a gradual economic revival.
The high cost of many manufactured raw materials was passed on by producers to consumers, causing inflation based on wholesale prices to reach an all-time high in November, while retail inflation remained high.
This year the price of edible oils also touched Rs 180-200 a litre.
Analysts and experts believe that high inflation will continue. However, a gradual recovery in economic growth and a good harvest prospects on the back of a normal monsoon will help in bringing down prices going forward.
The Reserve Bank looks at retail inflation as a key factor in reviewing the repo rate. It estimates consumer price index-based retail inflation to be around five per cent in the first half of next year.
Retail inflation, which was a little over 4 per cent in January 2021, has crossed 6 per cent twice this year. However, it came down to below five per cent in November.
On the other hand, WPI-based inflation touched a record high of 14.23 per cent in November. In 2020 it was 2.29 percent.
Suresh Nagpal, chairman of the Central Organization for Oil Industry and Trade (COOIT), said that the government has reduced the import duty on crude and refined edible oils several times to control the rising prices.
Indranil Pan, Chief Economist at Yes Bank said, “We expect that with growth normalizing, commodity prices are likely to moderate and this will be beneficial for India’s inflation. Global food prices are high but this will not have a direct impact on India as India has a sufficient buffer stock of food grains.