📌 Inflation Targeting in India
- Inflation Target Period: Set every 5 years.
- Current Target (2021–2026):
- Headline CPI Inflation: 4%
- Tolerance Band: ±2% (i.e., 2% to 6%)
- Reaffirmed in: March 2021
📉 Inflation Trends in Himachal Pradesh (FY2023-24 to FY2024-25)
✅ Overall Trend:
- Inflation in Himachal Pradesh remained within RBI’s tolerance range (2%–6%).
- Fluctuation Range in FY2024-25: 2.2% to 5.7%
🔻 Inflation Decrease:
| Indicator | FY2023-24 | FY2024-25 | Trend |
|---|---|---|---|
| CPI-Combined (CPI-C) | 5.0% | 4.2% | ⬇️ Decrease |
| CPI-Rural (CPI-R) | 5.1% | 4.4% | ⬇️ Decrease |
| CPI-Urban (CPI-U) | 4.7% | 3.3% | ⬇️ Decrease |
🔺 Inflation Increase:
| Indicator | FY2023-24 | FY2024-25 | Trend |
|---|---|---|---|
| CPI-Industrial Worker (CPI-IW) | 1.8% | 2.2% | ⬆️ Increase |
| CPI-Agricultural Labourers (CPI-AL) | 4.9% | 5.7% | ⬆️ Increase |
| CPI-Rural Labourers (CPI-RL) | 5.2% | 5.5% | ⬆️ Increase |
📊 Indices for Measuring Inflation
| Index | Full Form | Compiled By |
|---|---|---|
| WPI | Wholesale Price Index | O/o Economic Adviser, DPIIT |
| CPI-C | Consumer Price Index – Combined | National Statistical Office (NSO) |
| CPI-R | Consumer Price Index – Rural | NSO |
| CPI-U | Consumer Price Index – Urban | NSO |
| CPI-IW | CPI for Industrial Workers | Labour Bureau |
| CPI-AL | CPI for Agricultural Labourers | Labour Bureau |
| CPI-RL | CPI for Rural Labourers | Labour Bureau |
📝 Summary
- Inflation in HP is stable and under control.
- Rural areas have seen higher inflation than urban areas.
- Increase in CPI for labour categories indicates rising cost of living for daily-wage workers.
- All inflation indicators are within the RBI’s prescribed range (2% to 6%).
🌍 Global Inflation Trends
- 2022: Peaked at 8.7%
- Triggered by:
- Supply chain disruptions
- Geopolitical tensions (e.g., Ukraine war)
- Triggered by:
- 2024: Reduced to 5.7%
- Indicates moderating global price pressures but still higher than pre-pandemic levels.
🇮🇳 India’s Inflation Trends (2024–2025)
✅ Retail Inflation
- Measured by: Consumer Price Index (CPI)
- FY2024: 5.4%
- FY2025 (Apr–Dec): Moderated to 4.9%
🔍 Key Drivers of Inflation in India
🛒 1. Food Prices
- Consumer Food Price Index (CFPI) is a key determinant of retail inflation.
- Food items = ~40% of CPI basket.
- Recent food inflation:
- Not broad-based.
- Driven by select items (e.g., pulses, cereals, onions).
🔧 2. Core Inflation
- Excludes food and fuel.
- Dropped by 0.9 percentage points (FY2024 → FY2025 Apr–Dec).
- Decline led by:
- Core services inflation (more than goods).
- Lower fuel prices.
⛽ 3. Fuel Prices
- Drop in fuel costs contributed to relief in household budgets.
- Helped reduce pressure on transportation and input costs.
📉 4. Wholesale Price Inflation
- WPI was in deflationary zone:
- -0.7% in FY2024
- Continued to stay low in FY2025 (Apr–Dec)
- Reflects fall in input costs, supporting CPI moderation.
📊 CPI-Combined (CPI-C) Inflation – Himachal Pradesh & States (2024–2025)
🟠 Trend in Himachal Pradesh (2024)
- January 2024: Inflation at 5.1%
- October 2024: Peaked at 5.8%
- 🔺 Cause: Sharp rise in vegetable prices
- Adverse weather ➝ poor crop yields
- Rising transportation costs
- Supply chain disruptions
- 🔺 Cause: Sharp rise in vegetable prices
- January 2025: Inflation fell to 4.19%
- 🟢 Indicates effective economic control and cooling down
🛠️ Reasons for Decline (Post-August 2024)
- Possible effects of interest rate hikes by central bank
- Stabilization of vegetable supply chains
- Weather recovery and easing of transportation bottlenecks
⏳ Note: Impact of interest rate hikes on inflation is lagged, not immediate.
🌍 Comparison with Other States (January 2025)
- HP: 4.19% CPI-C
- Other states: Range from 1.8% to 8.8%
- Shows wide inter-state disparity in inflation trends
🧭 Reasons for State-wise Inflation Disparity
- Variation in:
- Agricultural output
- Supply chain efficiency
- Transportation infrastructure
- State economic and pricing policies
- Exposure to weather shocks and input cost changes
✅ Key Takeaway
- Himachal Pradesh maintained a moderate and stable inflation rate.
- Reflects effective governance, economic resilience, and price control measures.
- State outperformed many others in price stability.
📈 Contributors to CPI-C Inflation in Himachal Pradesh – 2024 vs 2017
🧮 Major Category-Wise Contributions (2024)
All values indicate the contribution share of respective groups to overall inflation.
🔺 Top Contributors to CPI-C Inflation:
- 🍛 Food & Beverages
- Contribution: 41.6% (💥 Highest contributor)
- 🔹 Shows food inflation as the dominant factor in driving overall prices.
- 🚬 Pan, Tobacco & Intoxicants
- Contribution: 35.6%
- 🔹 Significant hike in prices of these items.
- 👗 Clothing & Footwear
- Contribution: 19.0%
- 🔹 Reflects rising apparel and footwear costs.
- 📦 Miscellaneous Items
- Contribution: 23.9%
- 🔹 Includes transport, personal care, health services, etc.
🔻 Lowest (Negative) Contributor:
- 🔥 Fuel & Light
- Contribution: (-) 20.2%
- 🔹 Indicates deflationary effect in energy segment.
- 🔹 Lower fuel prices helped contain headline inflation.
📌 Definition:
CPI-IW is a specific inflation index that measures the cost of living for industrial workers in India.
🏢 Coverage:
It applies to industrial workers across:
- Factories
- Mines
- Plantations
- Railways
- Public motor transport undertakings
- Energy generation & distribution units
- Ports and docks
📅 Base Year Update:
- The base year was revised from 2001 to 2016.
- New series launched in September 2020 by the Labour Bureau.
🛒 Targeted Public Distribution System (TPDS) – Himachal Pradesh
🎯 Objective:
- To provide essential food grains at subsidized prices to the poor.
- To protect low-income households from price shocks.
- To ensure nutritious and adequate food as per the National Food Security Act, 2013 (NFSA).
📦 Commodities Distributed:
- Wheat, Wheat Atta, Rice, Sugar, etc.
🏬 Fair Price Shops (FPS) in Himachal Pradesh:
As of 31st December 2024, there are 5,330 FPS in the state.
📊 Ownership-wise Distribution of FPS:
| Type of Ownership | Number of FPS |
|---|---|
| Cooperative Societies | 3,387 |
| Panchayats | 25 |
| HPSCSC (State Corp.) | 48 |
| Individuals | 1,812 |
| Self Help Groups | 23 |
| Mahila Mandals | 35 |
| Total | 5,330 |
👥 Ration Card Coverage:
- Total Ration Cards under TPDS: 19,32,150
🧾 Beneficiary Categories under TPDS:
1️⃣ National Food Security Act (NFSA) Households:
- Antyodaya Anna Yojana (AAY) – Poorest of the poor
- Priority Households – Other poor households covered under NFSA
2️⃣ Other Than NFSA (OTNFSA):
- Also known as APL (Above Poverty Line) households
🏢 Himachal Pradesh State Civil Supplies Corporation (HPSCSC)
🔰 Overview
- Functions as the Central Procurement Agency for all controlled and non-controlled essential commodities.
- Handles distribution under:
- Targeted Public Distribution System (TPDS)
- National Food Security Act (NFSA)
- Mid-Day Meal Schemes
- State Subsidy Schemes
📊 Performance (FY 2024–25 up to December 2024)
- 💰 Turnover Achieved: ₹1681.76 crore
- 🎯 Expected Turnover (Full FY): ₹2100 crore
- 📊 Turnover Previous FY (2023–24): ₹1730.81 crore
🛒 Commodities Distributed
- Controlled: Rice, Wheat Atta, Sugar, Edible Oils, Kerosene
- Non-Controlled: Pulses, Salt, Cooking Gas, Diesel, Petrol, Medicines
🏬 Distribution Infrastructure
- Wholesale Godowns: 121
- Retail Shops: 47
- Gas Agencies: 54
- Petrol Pumps: 4
- Medicine Shops: 41 (New: 1 at AIMSS Chamiyana; 12 more planned)
🧒 Mid-Day Meal Scheme
- 🍚 Rice Supplied: 9,789.79 MT
- 📦 Distributed to Primary & Upper Primary Schools
🧾 Subsidized State Scheme Supplies
- Items: Pulses, Fortified Mustard & Refined Oil, Iodised Salt
- 💰 Value Distributed: ₹454.10 crore
- 🏛️ State Subsidy Budget Provision: ₹197.54 crore
🏗️ Government Supplies
| Item | Value (₹ in Crore) |
|---|---|
| Ayurvedic Medicines | 4.85 |
| Cement (Govt Depts/Boards/PSUs) | 110.84 |
| GI/DI/CI Pipes (Jal Shakti Dept.) | — (Included Total) |
| Total | ₹115.69 crore |
🧱 MNREGA Cement Supplies
- Bags Supplied: 32,36,660
- 💰 Cost: ₹101.93 crore
- ✅ Distributed to Various Panchayats
🏔️ Food Security in Tribal & Remote Areas
- Ensures supply of essential commodities and fuel in economically non-viable, inaccessible regions.
🌾 Procurement from Farmers
🌾 Paddy Procurement (Kharif Milling Season – KMS 2024–25)
- Quantity: 36,901.76 MT
- Purchase Value: ₹85.34 crore
- Farmers Benefited: 5,572
- Centres: 12
🌾 Wheat Procurement (Rabi Milling Season – RMS 2024–25)
- Quantity: 2,880.25 MT
- Purchase Value: ₹6.55 crore
- Farmers Benefited: 645
- Centres: 10
🌽 Maize Procurement (Natural Farming – KMS 2024–25)
- Quantity: 398.97 MT
- Purchase Value: ₹1.19 crore
- Farmers Benefited: 1,508
- Centres: 24
- Distributed as branded flour: “Him Bhog” (1 kg & 5 kg packs)