Odisha led the inflation chart in March with 7.05%

Odisha had the highest retail inflation rate among the major states in March, even as the national rate reduced to a 10-month low of 4.85%. In the state, the rate of inflation was 7.05 percent.

The Ministry of Statistics and Program Implementation provided statistics showing that the inflation rate in rural areas was greater than that in urban areas, at 7.27 percent and 6.46 percent, respectively. In terms of individual divisions, this was the highest among the states with a population over 50 lakh.

According to a review of the consumer price index (CPI) for the previous four quarters, the rate of inflation decreased to 7.55 percent in January and February 2024 from 3.75 percent in June 2023 to 8.73 percent in December.

In March of last year, when the urban share (5.61 %) was larger than the rural share (3.02 pc), Odisha had one of the lowest rates of inflation in the nation, at 3.75 pc. September of the previous year had a 5.87 percent inflation rate.

The increase in commodity prices is the reason for the state’s increased rate of inflation. Vegetables had the greatest inflation rate at 28.34 percent, followed by food and drinks (7.68 percent), eggs (10.33 percent), pulses and products (17.71 percent), and spices (11.4 percent).

According to economists, Odisha is more severely affected by inflation than other regions because of the constant increases in the costs of necessities. Because it is not a manufacturing state and imports the majority of its commodities, there are significant logistical and transaction expenses.

The state lacks the necessary infrastructure and facilities for transporting products, such as a road network and railway siding, which drives up logistic costs. Another factor contributing to the growing inflation rate, according to them, is the service sector’s relatively modest growth when compared to the nation as a whole.

According to Amarendra Das, secretary of the Odisha Economics Association, the recent reversal of the supply chain is the reason why inflation is greater in rural than in urban regions. “Food and drinks accounted for the largest percentage of the 12 subgroups that contributed to the inflation rate, at almost 45 percent. Previously, this was not the case, but now food and supplies are being delivered from cities to rural regions, he reasoned.

Prices often increase when demand exceeds supply for products and services, according to economics professor Kishore Chandra Samal. To lower the CPI, the state government will need to implement a variety of strategies. He said, “We urgently need to support farmers who have better access to markets and growth in the manufacturing sector.”