NDA-ruled states face higher inflation

More than half the states showing retail inflation over the national average of five per cent in October are ruled by National Democratic Alliance partners.

Of the 11 states showing higher inflation than the national average in October, six are ruled by the National Democratic Alliance, with Andhra Pradesh leading the pack, the data released by the Central statistics office showed on Thursday.

Andhra Pradesh, ruled by the Telugu Desam Party and the Bharatiya Janata Party, posted 8.14 per cent consumer inflation during the month.

Other BJP-ruled states with high inflation include Chhattisgarh at 7.52 per cent and Rajasthan at 6.17 per cent. The NDA-ruled Jammu and Kashmir has consumer inflation at 6.04 per cent.

Gujarat, which was led by Narendra Modi till April last year, saw 5.24 per cent inflation, while Jharkhand posted 5.39 per cent retail inflation.

The Narendra Modi government at the Centre has been struggling with spiralling food prices for the last one year, first triggered by onion and more recently pulses. The overall inflation has been under control, though on account of muted economic activity due to low investment and demand in the economy as well as softening international oil and other commodity prices.

Pulses posted 42.2 per cent inflation in October at an all-India level.

On the contrary, the six Congress-ruled states (including United Progressive Alliance coalition) have shown an average overall inflation of 4.5 per cent in October. Five of the six Congress-ruled states (including coalition in Bihar) have posted a below five per cent growth, with Kerala showing the second least rate of price rise at 3.37 per cent.

On the other hand, Punjab, where the Akali Dal-BJP government is in power, saw the least inflation at 3.18 per cent.

Bihar, where BJP lost by a wide margin to the Mahagathbandhan led by the Janata Dal (United),  also saw a low inflation of 4.89 per cent, which might have favoured the incumbent, Nitish Kumar.

The Central Statistics Office has only provided state-wise inflation for 22 states.

However Pronab Sen, chairman, National Statistical Commission, attributed the trend to the varying weights of different items of the consumption basket of different states vis-à-vis the all-India level.

“The state level indices have different weights which are specific to consumption in a particular state. CPI (Consumer Price Index) inflation in October was driven by pulses and sugar, so the states with higher consumption of these two items will show a higher inflation compared to other states," said Sen.

He cited the example of Bihar where the weight of cereals is much higher than weight in the all-India food basket to buttress his point.

The CPI-based inflation at an all-India level shot up to a four-month high of 5 per cent in October from 4.41 per cent in the previous month.

The image is used for representational purpose only. Photograph: Reuters