Retail inflation for farm and rural workers remains almost stable with a marginal rise

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The Ministry of Labour and Employment announced that retail inflation for agricultural and rural labourers rose marginally to 6.44 per cent and 6.67 per cent in April 2022. The All India Consumer Price Index numbers for agricultural and rural labourers for April rose 10 points to 1108 and 1119, respectively.

“Point to point rate of inflation based on the CPI-AL and CPI-RL stood at 6.44 per cent & 6.67 per cent in April 2022 compared to 6.09 per cent & 6.33 per cent respectively in March 2022 and 2.66 per cent and 2.94 per cent respectively during the corresponding month of the previous year,” said Ministry of Labour & Employment in an official statement.

The ministry said the major contributors to the increase in Consumer Price Index (CPI) based inflation for agriculture and rural labourers came from the food group to the extent of 7.32 and 7.13 points, respectively. This was due to an increase in the prices of Rice, Wheat-flour, Jowar, Bajra, Ragi, Vegetables and Fruits etc.

The rise and fall in Consumer Price Index (CPI) numbers differ from state to state. In the case of agricultural workers, it registered an increase of 1 to 20 points in 19 states, while a decrease of 7 points was registered in the state of Tamil Nadu. Tamil Nadu tops the index table with 1,275 points while Himachal Pradesh is at the bottom with 880 points.

In the case of rural labourers, it registered an increase of 2 to 19 points in 19 states and a decrease of 7 points in the state of Tamil Nadu. Tamil Nadu tops the index table with 1,263 points while Himachal Pradesh is at the bottom with 931 points.

Consumer Price Index

The Consumer Price Index or CPI or Market Basket is an index used to calculate retail inflation in a country. It is one of the important tools to evaluate inflation and deflation.

How is Consumer Price Index calculated?

The Consumer Price Index or CPI measures changes in the price of a common basket of goods and services by comparing them to prevailing prices during the same period of the previous year.

Consumer Price Index formula:

CPI = (Cost of market basket in a given year / Cost of market basket in base year) x 100

The annual percentage change of the CPI is also used to estimate inflation. In India, the base years for the current series of CPI(IW), CPI(AL) and CPI(RL) are 1982, 1986-87 and 1984-85 respectively.