CPI variation

Written by Saikat Neogi | Updated: May 20 2013, 06:22am hrs
While the consumer price index (CPI)-based inflation is trending down as the April print came in at 9.4%, which is 100 basis points lower than March, there is a wide variation in CPI across various regions of the country. In May 2012, the region-wise CPI was in the range of 10% and since then the divergence became wide. The north-eastern region of the country is reporting lower CPI inflation at 8.5% as compared with the rest of the country, especially the southern region where it is above 11%, indicating that region-specific factors like composition of consumption basket and transportation of fruits and vegetables play an important role in lower CPI. Also, according to a RBI note, availability of fair price shops and restrictions on inter-state movement of goods could have also led to the differences in CPI inflation across various regions in the country.

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There is a large variation in CPI by commodity groups in rural and urban areas as the fuel and light group has witnessed higher inflation in urban areas at 9% in April 2012 as compared with 7.7% in rural areas. However, overall food inflation is in the same range11% in urban areas and 10.5% in rural areas in April 2013.