Page 545 - ES 2020-21_Volume-1-2 [28-01-21]

172 Economic Survey 2020-21 Volume 2

sub-groups to CFPI shows that ‘vegetables’, ‘meat & fish’, ‘oils & fats’ and ‘pulses &products’
were the major contributors to food inflation in the current year (Figure 11). Contribution of
vegetables turned negative in December 2020 owing to sharp fall in vegetable prices. Cereals,
which contributed highly to food inflation in June 2020, has declined continuously since then.
Figure 11: Contribution of food sub-groups to CFPI

Source: NSO.

5.14 Inflation in vegetables remained elevated during the period September 2019 to April 2020.
It declined to 4 per cent in June 2020 and remained in double digits from July to November
2020. The rise in vegetables inflation was mainly on account of rise in prices of potatoes and
onions during the lean season. In the case of onion, arrivals declined by 74 per cent in April 2020
and by 62 per cent in case of potatoes in August 2020. However, immediate steps have been
taken by the Government to contain the price rise of these items, resulting in a steep decline in
vegetables inflation to (-)10.4 per cent in December 2020.

5.15 Apart from vegetables, inflation in some of the protein rich items like egg, meat &
fish and pulses & products remained elevated in the current year, thereby contributing
significantly to food inflation. The only exception was inflation in milk & products which
declined continuously from 9.4 per cent in April 2020 to 4.0 per cent in December 2020.
Inflation in meat & fish has remained in double digits in most part of the current year mainly
on account of rise in prices of chicken and mutton. After reaching peak in April 2020,
inflation in pulses & products declined, before rising to 18.3 per cent in October 2020 and
then declined to 16.0 per cent in December 2020. However, lately, inflation in all these items
has declined (Figure 12).
5.16 Further, inflation in oils & fats and spices has shown a rising trend in the current year.
However, sizeable drop in inflation since April 2020 has been observed for some of the major
food groups like cereals & products which declined from 7.8 per cent in April 2020 to 1.0 per
cent in December 2020, and sugar which declined from 10.3 per cent in April 2020 to 0.5 per
cent in December 2020 (Figure 13).