Rating agency Crisil on Monday said while urban inflation fell from 9 per cent to 5.3 per cent, rural inflation declined from 10.1 per cent to 6.2 per cent in the last one year.
The gap has remained 100 basis points in the recent past, caused by higher core and fuel inflation in the rural areas, its research said.
In 2015-16, rural core inflation was 6.7 per cent compared with 4.8 per cent in urban.
Among sub-categories such as health, education, household goods and services and recreation and amusement have all registered inflation in hinterland last fiscal.
According to the report, fuel inflation in rural was 6.8 per cent, more than two-and-a-half times the 2.7 per cent in urban due to surging prices of cooking fuel such as dung cake, firewood and chips.
“Inflation in firewood and chips — used by 84 per cent of the rural population compared with 23 per cent of urban was 7.4 per cent, while that in dung cake — used by close to 41 per cent of rural households compared with just 7 per cent in urban centres — was 10.8 per cent last fiscal,” it said.
According to the report, the data for the last five years show folks in rural areas – or 69 per cent of India’s population — have the rough end of the stick on inflation compared with their urban counterparts.
The research said the meltdown in commodity prices – petrol prices fell 7.6 per cent last fiscal, and diesel prices 11.7 per cent- hasn’t benefited rural areas as much as urban.
“37 per cent of urban households use petrol and 2 per cent use diesel for their vehicles- compared with less than half of that – 17 per cent petrol, and 0.8 per cent diesel — in rural households, according to data for fiscal 2012 (latest available),” the report said.