Page 543 - ES 2020-21_Volume-1-2 [28-01-21]

170 Economic Survey 2020-21 Volume 2

Meat and fish Egg

Source: NSO

5.10 In the ‘food and beverages’ group, a similar pattern is observed as in the case of CPI
headline and CPI core. In November 2020, decline in price momentum along with high base
effect helped ease food inflation (Figure 8). Among the various sub-groups under ‘food and
beverages’ group, different patterns emerge. For example, in case of cereals, since July 2020
the decline in monthly YoY inflation is led by both negative price momentum and positive base
effect. In case of oils and fats, the high inflation is mostly driven by substantial jump in price
momentum; base effect has been moderate in this case. Even in the case of vegetables, inflation
is mostly driven by large increase in price momentum since July 2020.

5.11 In ‘transport and communication’ and ‘personal care and effects’, increase in inflation
since April 2020 has been a result of sudden jump in price momentum (Figure 9). However, price
momentum moderated substantially since August 2020 in ‘transport and communication’ and
turned negative in September 2020 for ‘personal care and effects’. Overall, price momentum has
dominated the change in inflation during the year. Government has, therefore, rightly intervened
in containing inflation, especially in vegetables.

Figure 9: CPI Miscellaneous group and its sub groups inflation

Miscellaneous