Farm, rural workers get respite as price spiral eases in Feb
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 eased to 4.05 per cent and 4.1 per cent, respectively, compared to 7.43 per cent and 7.36 per cent in February 2024, bringing respite to poor households, official figures released on Monday showed.
The easing of the price spiral was also evident in comparison to the previous month of January, when the corresponding figures stood at 4.61 per cent for CPI-AL and 4.73 per cent for CPI-RL.
The inflation for agricultural and rural labourers has been steadily declining over the last six months. This comes as a welcome relief for these vulnerable segments that are hit hardest by spiralling prices. It also leaves more money in their hands to buy a wider range of goods, leading to a better lifestyle.
The decline in inflation for farm and rural workers also come in the backdrop of a fall in the country’s overall retail inflation to a 7-month low of 3.61 per cent in February this year, which is 0.65 per cent lower than the corresponding figure for January, as food prices came down further during the month. This is the lowest retail inflation after July, 2024.
The significant decline in headline inflation and food inflation during February is mainly attributed to decline in inflation of vegetables, egg, meat and fish, pulses, as well as milk and products.
Prices of fuel also came down during the month, easing the burden on household budgets with inflation being recorded at -1.33 per cent during February.
As the retail inflation is continuing with its downward trend and has fallen below the RBI’s targeted level of 4 per cent, the central bank will have more headroom to go for a rate cut to propel economic growth and create more jobs.
RBI Governor Sanjay Malhotra last month announced a 25 basis cut in the policy rate from 6.5 per cent to 6.25 per cent in the monetary policy review to accelerate growth amid global uncertainties.
He said that inflation has declined and is expected to further moderate and gradually align with the RBI’s target of 4 per cent.
The monetary policy decision maintains a delicate balance between controlling inflation and pushing up the growth rate in a slowing economy,
The MPC also unanimously decided to continue with its neutral stance in monetary policy and will focus on inflation while supporting growth. This would provide flexibility to respond to the macroeconomic environment, Malhotra said.
