Daman & Diu only region with deflation; 15 states, UTs have lower inflation than national average

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Published: June 28, 2019 2:26:17 PM

The maximum inflation was seen in north-eastern state Manipur at 8.7%, which far surpasses the national average.

WPI Inflation in may 2019(Reuters)

The Union Territory of Daman & Diu has recorded negative inflation of 1.19% and is the only administrative division out of 35 states (states plus union territories) where the average price of a basket of goods has fallen, said a report. Along with this, 15 other states have also witnessed a lower inflation rate than the national average of 3.4% in FY19, the CARE Ratings report said. The maximum inflation was seen in north-eastern state Manipur at 8.7%, which far surpasses the national average. The lowest price change in the Consumer Price Index (CPI) was seen in Himachal Pradesh at 0.49%. Also, the 16 states which have lower inflation have a weightage of 42.8% of the total CPI index, the report added.

Which items are getting costlier, and in which states

States such as Andaman and Nicobar, Kerala and Manipur recorded double-digit inflation in items like pan, tobacco and intoxicants. On the other hand, a few states namely Assam, Jharkhand, Nagaland, Andaman and Nicobar and Jammu & Kashmir have recorded inflation in fuel components. Housing is also a key area where inflation rates have soared — Lakshadweep, Jammu and Kashmir, Jharkhand, Andaman and Nicobar and Uttar Pradesh recorded double-digit growth in the prices of housing component, said the CARE Ratings report. However, Manipur, Andaman and Nicobar and Nagaland did not witness major inflation in food prices.

Why the steep price rise

“The geographical distance of these places could be a critical factor impeding supply and pushing prices of commodities higher,” the report commented on the inflation in five north-east states, two island territories and Jammu and Kashmir which is in the extreme north of India. 

The rural inflation has been comparatively lower than the urban inflation in FY19 “and that can be primarily on account of lower rural food inflation and inflation in the clothing and footwear segment in the rural segment,” the report observed. Also, the food inflation, which is the highest weighing component in CPI-combined basket, has also been 1% down in both rural and urban regions. The Consumer Price Index inflation has sustained decline over the last seven years.

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