In accordance with the latest Consumer Price Index (CPI) data released by NSO, the Consumer Price Inflation has undergone a descent from 7.44 to 6.83. While the total fall in Consumer Food Price Inflation (CFPI) is 1.57% (9.94 in August compared to 11.51 in July).
Mrs. Nilanjana Karmakar, the Head of Department (HOD) Economics, Delhi Public School Ruby Park, Kolkata, expressed that the decrease in CPI is a positive sign. “The RBI has been working for quite some time to see this change; incessantly increasing the repo rates in order to capture the inflation,” she voiced. The HOD also mentions that the supply chain disruption that surged during the post pandemic period has eased down as well.
As per the Economics Assistant Professor at World Peace University, Dr. Jivan Biradar, the fall in tomato prices played a major role in mellowing down the CPI. He expressed, “Even though the tomato segment in our total inflation is very minute, it set a positive tone in the economy.” However, the Assistant Professor also voiced apprehension about the CPI likely to increase in future because of the following reasons: unevenness of rainfall, prices of crude oil rising at the global level and because of Saudi Arabia’s recent announcement of oil supply cuts.
However Dr. G. N. Mallikarjunappa, M.Com Ph.D, retired Principal, now a Quality Education Consultant and freelance writer had contrasting opinions. “The decline in CPI reflects the decrease in purchasing capacity of consumers which is supported by the increasing rate of unemployment,” he voiced. “In my opinion the fall in CPI is not owing to an increase in supply of goods and services, but is due to less income in the hands of individuals. As long as unemployment is prevalent, decrease in CPI does not indicate a positive sign of development. The GDP is decreasing, while CPI is also decreasing; it is a sign that we are moving towards poverty,” Dr. Mallikarjunappa adds.
Mr. T. S. Venugopal, retired statistics professor, Maharani’s Science College, Mysore, said that since the inflation came down only owing to reduction in tomato prices, it is not a proper index; “If change in price of one commodity can alter the CPI entirely, then there must be something wrong in that measure,” he expressed. The retired professor also referred to the IMF report and said that too much profit (mostly made by corporations) is responsible for inflation. “The entire world was coming down due to covid, but corporations were still making profits, how?” Mr. Venugopal added. As an endnote he mentioned that the CPI as measured now, must be updated, truly reflecting the expenditure of a common man.
The Press Release on CPI for August 2023 shows a decrease in inflation in all the groups, besides Pan, tobacco and intoxicants which rose from 3.80 to 4.10 and Fuel and light that increased to 4.31 from 3.67.