ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By Tulsi Lingareddy

What Is Driving Rural Inflation at a Higher Rate?

Consumer price inflation in rural areas has been persisting at a higher rate than that in urban areas and the gap between the two has stood at 1.5 percentage points in May 2016. Inflation of both series slowed considerably during the last two years or so, the moderation in rural areas has been slower than in urban areas. This was partly due to compositional differences accompanied by divergent price movements and partly due to higher marketing costs and trade margins resulting from the prevailing rural–urban divide in terms of infrastructure bottlenecks, inadequate logistics support, etc. 

Inflation with Disinflation?

Price inflation in India as measured by the Wholesale Price Index and the Consumer Price Index has shown diverging trends. While WPI indicates a disinfl ationary situation for 16 months, CPI indicates inflation. Explaining the construction of the two indices, the trends of subgroups of both indices are presented. It is found that the different sample sizes and weightages of commodity groups of both indices and price interventions in the market explains, at least in part, this odd situation of infl ation along with disinfl ation.

Expert Committee on Commodity Futures: Agreements and Disagreements

In its recent report, the expert committee on commodity futures concludes that futures trade in India has increased the price volatility of largely traded commodities (urad, chana, wheat) during periods of excess liquidity. It finds an increase in prices for commodities that have small market sizes and scarce deliverable supplies (mentha oil, wheat). In contrast, futures trading has led to a reduction in volatilities and aided better discovery for other commodities (soya oil, hessian). It appears that futures trade in agricultural commodities is beneficial for only those commodities that fulfil the basic selection criteria for futures trading accompanied by stringent and timely regulatory actions.