Writing in the monthly economic review report for April, the union finance ministry has said, the poor were hurt less by higher prices in FY22 as compared to the rich. In FY22, inflation for the bottom 20 percent of urban consumers fell to 5.7 percent from 6.8 percent, while inflation for the top 20 percent fell to 5.7 percent from 6.5 percent, the ministry added.
The ministry’s findings are apparently in conflict with comments made by Reserve Bank of India Governor Shaktikanta Das on May 4, when he said sustained high inflation has “pronounced adverse effects on the poorer segments of the population by eroding their purchasing power”.
In its review report, the finance ministry used data from the 2011-12 National Sample Survey on Household Consumer Expenditure to arrive at its conclusions. It classified the Indian consumer into three broad classes: the top 20 percent, the middle 60 percent and the bottom 20 percent. Further, their expenditure was also categorised into three classes: food and beverages, fuel and light (including transportation), and items excluding food and fuel.
Inflation for the bottom 20 percent of rural consumers decreased to 5.2 percent in FY22 from 6.0 percent in FY21. For their urban counterparts, inflation fell to 5.7 percent from 6.8 percent.
Inflation for the middle 60 percent of rural consumers decreased to 5.3 percent in FY22 from 5.9 percent in FY21. For their urban counterparts, inflation fell to 5.7 percent from 6.8 percent.
Inflation for the top 20 percent of rural consumers increased to 5.6 percent in FY22 from 5.5 percent in FY21. For their urban counterparts, inflation fell to 5.7 percent from 6.5 percent
Meanwhile, another data released on May 12 by the Ministry of Statistics and Programme Implementation showed Consumer Price Index (CPI) inflation surged to 7.79 percent in April. It showed rural inflation in April to be at 8.38 percent – the highest in exactly eight years, i.e., since the Narendra Modi-led government first took charge in late May 2014. Urban inflation in April was 7.09 percent, the highest in 18 months.