Page 535 - ES 2020-21_Volume-1-2 [28-01-21]

162 Economic Survey 2020-21 Volume 2

IntroductIon
5.1 Year 2020 was unprecedented with the global pandemic of COVID-19 induced social
distancing disrupting economic activity globally. At the domestic level, two opposing forces
were at play. On the one hand, there was a dampening of demand owing to lower economic
activity. On the other hand, supply chain disruptions have caused spikes in food inflation that
have continued to persist during the unlocking of the economy, though the effect has softened
in the recent months. Overall, headline CPI inflation remained high during the lockdown period
and subsequently as well, due to the persistence of supply side disruptions (Table 1). At the
global level, inflation remained benign on the back of subdued economic activity as a result
of COVID-19 outbreak and sharp fall in international crude oil prices in advanced economies.
In Emerging Markets and Developing Economies (EMDEs), there was slight fall in inflation
on account of weaker economic activity, though there has been uptick in inflation in some
economies ending at similar levels as in the previous year (IMF, 2020) (Figure 1).

Table 1: General inflation based on different price indices (in per cent)
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21*
WPI 5.2 1.2 –3.7 1.7 3.0 4.3 1.7 –0.1 (P)
CPI - C 9.4 5.9 4.9 4.5 3.6 3.4 4.8 6.6 (P)^
CPI - IW 9.8 6.4 5.6 4.2 2.9 5.6 7.3 5.5 #
CPI - AL 11.6 6.6 4.4 4.2 2.2 2.1 8.0 7.0
CPI - RL 11.5 6.9 4.6 4.2 2.3 2.2 7.7 6.8
Source: Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade (DPIIT) for
Wholesale Price Index, National Statistical Office (NSO) for CPI-C and Labour Bureau for CPI-IW, CPI-AL and
CPI-RL.
Notes: #CPI-IW inflation for 2020-21 is based on new series 2016=100; (P) - Provisional; C- stands for Combined,
IW- stands for Industrial Workers, AL - stands for Agricultural Labourers and RL- stands for Rural Labourers.
* April to December 2020 for WPI, CPI-C and April- November 2020 for others.
^ CPI-C inflation for the months of April-May, 2020 are imputed, which are based on limited set of observations
due to COVID-19 pandemic.

Figure 1: Annual Average Consumer Price Inflation in Advanced Economies and EMDEs

Source: World Economic Outlook, October 2020 Update, IMF
Note: *The figure for 2020 is projected by IMF
Advanced Economies include 16 economies and EMDEs include 156 economies as per IMF
classification