Lok Sabha Question No. 376 (UNSTARRED), answered on 2024-02-05
Subject: High Inflation
Ministry: FINANCE
Asked by: Kunwar Danish Ali

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 376 DUE FOR ANSWERED ON 05.02. 2024

## HIGH INFLATION

†376. KUNWAR DANISH ALI:

Will the Minister of FINANCE be pleased to state:

- a)  whether retail and wholesale inflation have soared record high in the country;
- b)  if so, the details thereof and the reasons therefor;
- c)  the  extent  to  which  increasing  prices  of  food  and  fuel  are  responsible  for increasing rate of inflation;
- d)  the  details/statement  showing  difference  between  inflation  rates  during  the  last five  years and the current year alongwith the impact of inflation on households and jobs;
- e)  the  details  of  major  commodities  contributing  in  soaring  wholesale  and  retail inflation in the country as well as the details/statements of taxes on petrol, diesel and  auto  gases  alongwith  the  percentage  of  their  contribution  in  increasing wholesale and retail inflation;
- f) whether any target has been set by the Government to control inflation rate and provide employment to the people or any steps have been taken in this regard; and
- g)  if so, the details of outcome exhibited as a result of various measures taken by the Government to mitigate inflation?

## ANSWER

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

(a) & (b): The consumer price inflation declined in 2023-24 (April-December) to 5.5 per cent as compared to 6.8 per cent in 2022-23 (April-December). The wholesale price  inflation  rate  was  (-)  1.1  per  cent  in  FY24  (April-December),  which  was  the lowest in  the  last  eight  years.  Temporary  price  pressures  are  caused  by  demandsupply  mismatches  arising  out  of  global  shocks  and  adverse  weather  conditions. Proactive supply-side initiatives by the Government and measures by the Reserve Bank of India have helped to rein in inflation.

- (c): 'Food & beverages' group and 'fuel & light' group contributed 57.7 per cent and 2.8 per cent respectively to overall retail inflation in 2023-24 (April-December).
- (d)  Retail  inflation  rate  based  on  Consumer Price Index-Combined for the last five years and the current year is given below:

|   2018-19 |   2019-20 |   2020-21 |   2021-22 |   2022-23 |   2023-24 (April-Dec) |
|-----------|-----------|-----------|-----------|-----------|-----------------------|
|       3.4 |       4.8 |       6.2 |       5.5 |       6.7 |                   5.5 |

Appropriate  supply  side  and  trade  policy  interventions,  as  well  as,  measures  like provision of free food grains under Pradhan Mantri Garib Kalyan Anna Yojana and increase in targeted subsidy of LPG for Pradhan Mantri Ujjwala Yojana beneficiaries helped making essential items available to households at reasonable prices. As per the annual Periodic Labour Force Survey, the unemployment rate (persons age 15 years and above, as per Usual Status) declined from 6 per cent in 2017-18 to 3.2 per cent  in  2022-23  with  simultaneous  increase  in  labour  force  participation  rate  from 49.8 per cent in 2017-18 to 57.9 per cent in 2022-23.

- (e):  The  major  items  that  contributed  to  retail  inflation  in  April-December  2023  are non-PDS rice  and  wheat/atta,  liquid  milk,  rental  payments,  jeera,  medicine,  arhar, onion,  garlic,  etc.  The  major  commodities  that  contributed  to  wholesale  inflation  in April-December 2023 are high-speed diesel, cotton yarn, palm oil, tomato, etc. The total central excise duty on petrol is Rs.19.90 per litre and on high speed diesel, it is Rs.15.80 per litre.  The total central excise duty on compressed natural gas is 14 per cent, and, on liquefied natural gas, it is 'nil'.
- (f)  &  (g):  The  Government  has  notified  inflation  target  for  the  period  from  April  1, 2021 to March 31, 2026 as 4 per cent, with upper tolerance level of 6 per cent and lower  tolerance  level  of  2  per  cent.  The  measures  taken  by  the  Government  to control  inflation inter  alia include  strengthening  of  buffers  of  key  food  items  and making  periodic  open  market  releases,  easing  imports  of  essential  food  items, preventing hoarding, and channelling supplies through designated retail outlets. As a result,  the  retail  inflation  is  now  stable  and  within  the  notified  tolerance  band.  The Government  is  implementing  many  schemes  for  generating  employment and livelihood  and  for  improving  employability  of  people.  These  include  Aatmanirbhar Bharat  Rojgar  Yojana,  Garib  Kalyan  Rojgar  Abhiyaan,  Mahatma  Gandhi  National Rural  Employment  Guarantee  Act,  Deendayal  Antyodaya  Yojana-National  Rural Livelihoods  Mission,  Prime  Minister's  Employment  Generation  Programme,  Deen Dayal  Upadhyaya  Grameen  Kaushalya  Yojana,  Pradhan  Mantri  Rojgar  Protsahan Yojana, Pradhan Mantri Mudra Yojana etc .

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