BHUBANESWAR : Even as retail inflation rate in the country eased to a 10-month low of 4.85 per cent, it was the highest in Odisha among major states in March. The inflation rate was 7.05 per cent in the state.
As per the data released by the Ministry of Statistics and Programme Implementation, the rural inflation rate was higher than the urban with 7.27 pc and 6.46 pc respectively. This was the highest in individual segments among the states having a population of more than 50 lakh.
An analysis of consumer price index (CPI) for last four quarters indicated that the inflation rate that had shot up from 3.75 pc in June 2023 to 8.73 pc in December dropped to 7.55 pc in January and February 2024.
At 3.75 pc, the inflation rate in Odisha was one of the lowest in the country in March last year when the urban share (5.61 pc) was higher than the rural (3.02 pc). The inflation rate was 5.87 pc in September last year.
The higher inflation rate in the state is attributed to the rise in the price of commodities. The inflation rate of vegetables was the highest at 28.34 pc, followed by pulses and products (17.71 pc), spices (11.4 pc), eggs (10.33 pc) and food and beverages (7.68 pc).
Economists said Odisha is bearing the brunt of inflation more than others due to relentless price rise of everyday-use items. It is not a manufacturing state and most of its goods are imported from outside thereby leading to high logistic and transaction costs.
“Logistic cost is very high in the state, which does not have required goods handling facilities and infrastructure, including railway siding and road network. Relatively low growth of the service sector as compared to the rest of the country is also another reason behind the rising inflation rate,” they said.
Secretary of Odisha Economics Association Amarendra Das said inflation in rural areas is higher than the urban because the supply chain has just reversed. “Of the 12 sub-groups that led to the inflation rate, the share of food and beverages was the highest at about 45 pc. Now goods and food items are being transported to rural areas from cities which was not the case earlier,” he reasoned.
Professor of economics Kishore Chandra Samal said when demand for goods and services outpaces supply, prices tend to rise. The state government will have to take multi-faceted measures to bring down the CPI. Support to farmers with better access to markets and growth in the manufacturing sector are the need of the hour, he added.