Farmers and Rural Workers Find Relief as Inflation Declines in February
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Synopsis
Inflation rates for agricultural and rural workers in India have decreased significantly in February, offering relief to poor households. The CPI-AL and CPI-RL figures dropped to 4.05% and 4.1%, respectively, compared to last year. This trend is part of a broader decline in retail inflation, benefiting the economy and vulnerable communities.
Key Takeaways
- Inflation rates for agricultural and rural workers fell to 4.05% and 4.1% in February.
- Reduction in prices offers relief to low-income households.
- Overall retail inflation reached a 7-month low of 3.61%.
- Significant declines were noted in food prices and fuel costs.
- The RBI may consider further rate cuts to aid economic growth.
New Delhi, March 24 (NationPress) The year-on-year inflation rates based on the all-India consumer price index for agricultural labourers (CPI-AL) and rural labourers (CPI-RL) for February this year decreased to 4.05 per cent and 4.1 per cent, respectively, in contrast to 7.43 per cent and 7.36 per cent in February 2024, providing relief to impoverished households, according to official statistics released on Monday.
This reduction in the price escalation was also noticeable when compared to January, when the figures were 4.61 per cent for CPI-AL and 4.73 per cent for CPI-RL.
The inflation rates for agricultural and rural workers have been consistently declining over the past six months, which is a significant relief for these vulnerable groups who are most affected by rising prices. This shift allows them to retain more money for purchasing a broader array of products, thereby enhancing their quality of life.
The drop in inflation for farmers and rural workers occurs alongside a decrease in the nation’s overall retail inflation, which fell to a 7-month low of 3.61 per cent in February this year, marking a reduction of 0.65 per cent from January's figures, attributed to a further decline in food prices during the month. This is the lowest retail inflation recorded since July 2024.
The substantial reduction in both headline and food inflation during February is primarily due to decreases in the prices of vegetables, eggs, meat and fish, pulses, as well as milk and its products.
Additionally, fuel prices also saw a decline during the month, alleviating pressures on household budgets with an inflation rate of -1.33 per cent recorded for February.
As retail inflation continues to trend downward, falling below the RBI’s target of 4 per cent, the central bank may have more flexibility to implement a rate cut to stimulate economic growth and generate additional jobs.
RBI Governor Sanjay Malhotra announced last month a 25 basis point reduction in the policy rate, lowering it from 6.5 per cent to 6.25 per cent during the monetary policy review aimed at promoting growth amid global uncertainties.
He noted that inflation has decreased and is expected to continue moderating, gradually aligning with the RBI’s target of 4 per cent.
The monetary policy decision aims to maintain a careful balance between controlling inflation and enhancing growth in a slowing economy.
The MPC unanimously agreed to maintain a neutral stance in monetary policy, focusing on inflation while also supporting growth. This approach will allow for flexibility in responding to the macroeconomic landscape, according to Malhotra.
