Lok Sabha Question No. 3572 (UNSTARRED), answered on 2022-08-08
Subject: Wholesale and Retail Inflation
Ministry: FINANCE
Asked by: Asaduddin Owaisi, Kalyan Banerjee, Balubhau (Alias Suresh Narayan) Dhanorkar, K. Muraleedharan, Thirumaa Valavan Thol, Krupal Balaji Tumane

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 3572 TO BE ANSWERED ON 08.08.2022

## WHOLESALE AND RETAIL INFLATION

## 3572. SHRI ASADUDDIN OWAISI:

SHRI KALYAN BANERJEE:

SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

SHRI K. MURALEEDHARAN:

SHRI THIRUMAAVALAVAN THOL:

SHRI KRUPAL BALAJI TUMANE:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Wholesale Price Inflation (WPI) has reached a record high to 15.9 per cent while Consumer Price Inflation (CPI)/Retail Inflation reached to 7.04 per cent from 5 per cent in June last year, remaining above the RBI's inflation target for the fifth consecutive month;
- (b) if  so,  the  details  thereof  along  with  the  reasons  therefor  and  the  extent  upto  which surging food and fuel prices are responsible for this rate of inflation;
- (c) the details of the difference between the inflation rates during the last five years and the current year along with the impact of inflation on households and employment;
- (d) the individual details of top ten items that contribute for the rising Wholesale and Retail Inflation in the country along with the details of taxes on petrol, diesel, auto gases and their percentage of contribution to the rising Wholesale and Retail Inflation; and
- (e) whether the Government has fixed any target and taken steps to restrict the inflation rate and provide employment to the people and if so, the details thereof along with the results shown to bring down inflation by taking various measures?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) & (b):  Wholesale price Inflation based on the Wholesale Price Index (WPI) was 15.18 per  cent  in  June  2022,  while  the  Retail  inflation  rate  based  on  Consumer  Price  IndexCombined (CPI-C) was 7.01 per cent in June 2022 as compared to 6.26 per cent in June 2021.

Soaring international commodity prices and pandemic-induced supply-demand imbalances caused a rise in inflation rates worldwide including in India. The Russia-Ukraine conflict has exacerbated  the  inflationary  pressures  in  crude  oil,  gas,  and  metals.  Further,  the  onset  of summer heat waves has led to crop damage and a rise in vegetable prices.

While the inflation rate in 'fuel and light' declined in June 2022, those for certain food items increased in the same month as compared to June 2021

.

(c): The CPI-C for the last five years and the current year is given in Annexure.

(d): Top ten items that have contributed to the rising retail inflation in June 2022 are tomato, kerosene  -  PDS,  milk,  house/garage  rent,  LPG  [excl.  conveyance],  chicken,  wheat/atta  other sources, medicine (non-institutional), refined oil and potato. The top ten items that have contributed to the wholesale inflation in June 2022 are high speed diesel, crude petroleum, tomato,  petrol,  electricity,  raw  cotton,  furnace  oil,  kerosene,  milk,  and  natural  gas.  Total excise duty including cesses on petrol and HSD is Rs. 19.9 per litre, and Rs. 15.8 per litre, respectively. The total excise duty on CNG is 14 per cent.

(e): Several supply-side measures taken by the Government to address inflation, inter alia, include:

1.  Reduction in Central Excise Duty on Petrol & Diesel by Rs. 5 and Rs. 10 respectively with effect in November 2021. This was followed by a further reduction in excise duty by Rs. 8 per litre on petrol and Rs. 6 per litre on diesel in May 2022.
2.  Imposition of stock limits on some pulses under the Essential Commodities Act, 1955 in July 2021 to prevent hoarding.
3.  On  26 th July  2021,  import  duty  and  Agriculture  Infrastructure  and  Development  Cess (AIDC) on Masur were brought down from 10 per cent to zero and 20 per cent to 10 per cent  respectively.  On  February  12,  2022,  Agriculture  Infrastructure  and  Development Cess on Masur was brought down to zero. In July 2022, the existing nil rate of AIDC has been extended up to 31 st March 2023.
4.  Changes have been made in the import policy, on March 30, 2022, by keeping Tur and Urad  under  the  'Free  Category'  till  31.03.2023  which  will  ensure  their  smooth  and seamless import.
5.  Tariffs on edible oils have been rationalized and stock limits on edible oils and oil seeds have been kept, to avoid hoarding. The basic duty on refined palm oil was reduced from 17.5 per cent to 12.5 per cent w.e.f 21.12.2021. The basic duty on crude palm oil was reduced from 7.5 per cent to 5 per cent w.e.f 12.2.2022.
6.  In  June  2021,  5-year  Memorandum  of  Understanding  (MoUs)  have  been  signed  with Myanmar for annual import of 2.5 LMT of Urad and 1 LMT of Tur, and with Malawi for annual import of 0.50 LMT of Tur. The MoU with Mozambique has been extended for another 5 years for annual import of 2 LMT Tur.
7.  As per notification dated 14 th October 2021, the total duty on crude soya bean oil and refined sunflower oil has been reduced from 32.5 per cent to 17.5 per cent.
8.  Government on May 24, 2022  , exempted customs duty and Agriculture Infrastructure Development Cess on yearly import of 20 lakh metric tonnes each of crude soya bean and sunflower oil for the year 2022-23 and 2023-24.
9.  In  December  2021,  the  Government  had  notified  an  Order  under  the  Essential Commodities Act to declare 'Soya Meal' as an Essential Commodities up to 30 th June, 2022 by amending the Schedule of the Essential Commodities Act, 1955. Stock limit on Soya Meal has been imposed for a period from 23 rd December, 2021 up to 30 th June, 2022.
10.  Amendment in March 2022 of the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs Order, 2016 and its Central Order dated February  3,  2022  by  extending  the  stock  limits  for  all  Edible  Oils  and  Oilseeds  put together for a period up to December 31, 2022 for all States/Union Territories. This order is effective from April 1, 2022 up to December 31, 2022.
11.  In  July  2022,  the  government  has  asked  producers  to  implement  a  reduction  in  retail prices and ensure price uniformity across geographies amidst a decline in global prices of  edible oils.  The  Central  Government has directed leading Edible Oil Associations  to ensure  a  reduction  in  the  MRP  of  edible  oils  by  Rs.  15/-  with  immediate  effect.  The Centre has also advised that the price to distributors by the manufacturers and refiners needs to be reduced immediately so that the price drop is not diluted in any way.
12.  The  Government  of  India  on  May  21,  2022,  announced  the  provision  of  subsidy  of Rs.200  per  gas  cylinder  (up  to  12  cylinders)  to  the  beneficiaries  of  Pradhan  Mantri Ujjwala Yojana.
13.  Government  has  waived  custom  duty  on  cotton  imports  w.e.f  April  14,  2022  till September 30, 2022.
14.  Import  duties  on  plastic  and  steel  among  other  products  have  also  been  substantially reduced.

The measures undertaken by the Government have led to a decrease in Wholesale Price inflation and Retail inflation rate in June 2022.

The  measures  taken  to  improve  employment  in  the  country, inter alia, include the Aatmanirbhar Bharat package for making the country self-reliant and for creating employment opportunities, Aatmanirbhar Bharat Rojgar Yojana, Garib Kalyan Rojgar Abhiyaan (GKRA), Production Linked Incentive (PLI) scheme, and Pradhan Mantri Mudra Yojana, MGNREGS etc .

## ANNEXURE

STATEMENT REFERRED TO PART (c) IN REPLY TO THE LOK SABHA UNSTARRED  QUESTION  NO.  3572  RAISED  BY  SHRI  ASADUDDIN OWAISI AND OTHERS FOR 8 TH  AUGUST 2022

Monthly Retail Inflation based on CPI-C (Base 2012) (Y-o-Y) (%)

| Year/Month   | Inflation Rate (%)   |
|--------------|----------------------|
| 2017-18      | 3.59                 |
| 2018-19      | 3.41                 |
| 2019-20      | 4.77                 |
| 2020-21      | 6.16                 |
| 2021-22      | 5.51                 |
| 2022-23      |                      |
| April        | 7.79                 |
| May          | 7.04                 |
| June*        | 7.01                 |

Source: NSO, MoSPI, Note: *Figures for June 2022 is provisional