Why in news
The wedge between headline and food inflation has been widening and stalling the alignment of the former with the target
Monetary Policy Committee (MPC) decided to maintain policy rates to keep inflation aligned with the 4% target, despite persistent high food inflation which is affecting overall inflation rates.
Headline Inflation
Headline Inflation is the measure of total inflation within an economy.
It includes price rise in food, fuel and all other commodities.
The inflation rate expressed in Wholesale Price Index (WPI) usually denotes the headline inflation.
Though Consumer Price Index (CPI) values are often higher, WPI values traditionally make headlines
Food Inflation
Food inflation refers to the increase in the prices of food items over time.
It is a concern because rising food prices can significantly impact household budgets and lead to higher living costs for consumers.
Several factors contribute to rising food prices, including climate-related issues that can impact crop yields : droughts, dry spells, heatwaves, erratic rains
Additionally, government policies such as export curbs on essential food items can affect prices.
COMMENTS