New Delhi: Inflation in the country continued to moderate during 2017-18. The Consumer Price Index(CPI)-based headline inflation averaged 3.3% during the period, which is the lowest in the last six financial years. The Economic Survey 2017-18, placed in Parliament on Monday by Union Minister for Finance and Corporate Affairs Arun Jaitley, stated.
“If we a look at state-wise inflation during 2017-18, many states have witnessed sharp fall in CPI inflation. Inflation in 17 States was below 4% during the period. This has been possible due to various efforts made to contain inflation at various levels by the government,” the survey stated.
The decline in the inflation was broad-based across major commodity groups except in housing, fuel and light. The headline inflation was below 4% for 12 straight months, from November 2016 to October 2017. The CPI food inflation averaged around 1% during April-December in the current financial year, says the survey.
The survey observes that the economy has witnessed a gradual transition from a period of high and variable inflation to more stable prices in the last four years. Headline inflation measured by the CPI has remained under control for the fourth successive year. In fact, the decline in the inflation in the first half of the current fiscal year was indicative of a benign food inflation which ranged between -2.1% to 1.5%. The survey says, “This has been possible due to good agricultural production coupled with regular price monitoring by the government.”
However, the rise in food inflation in recent months is mainly due to factors driving prices of vegetables and fruits. In rural areas, while food was the main driver of CPI inflation during 2016-17, in urban areas, the housing sector has contributed the most to inflation in the current financial year.
Good agricultural production added to regular price monitoring by the government helped contain food inflation, the survey noted.
As for State-wise inflation during 2017-18, many States have witnessed a sharp fall in CPI inflation. Inflation in 17 States was below 4% during the period. This has been possible due to various efforts made to contain inflation at various level by the Union government, says the Survey.