India registered 14-month high in retail inflation to at 6.2 per cent in October, primarily driven by inflation in a few vegetables, oil, and fats
A record production of kharif crops for the fiscal year 2024-25 is likely to lower food inflation in the upcoming months. The kharif crop production is estimated at 164.7 million tonnes, higher by 5.7 per cent compared to 2023-24, the Department of Economic Affairs revealed in its Monthly Economic Review.
The report also predicted an 8.2 per cent rise in kharif crop production for the FY2024-25 than the average food grain production in the past five years.
"The estimated increase is mainly on account of the rise in rice, maize, coarse grains and oilseeds output," said the report.
It also noted that despite increased acreage, pulse production estimates remain marginally lower, primarily due to crop damage from excessive rains in key producing regions.
India registered a 14-month high in retail inflation at 6.2 per cent in October, primarily driven by inflation in a few vegetables, oil, and fats.
The finance ministry's report suggested that during April-October of FY25, the average inflation rate stood at 4.8 per cent, as compared to 5.5 per cent during the same period last year. Core inflation also eased to 3.3 per cent against 4.9 per cent during April-October FY24.
The report further elaborated that adequate storage in the reservoir has also ensured a steady supply of water for crop irrigation.
"As of 7 November 2024, reservoir storage levels in all regions, except the Northern region, were higher than the corresponding period last year and exceeded normal storage levels," the report highlighted.
The review report also noted that increased Minimum Support Prices (MSPs) of various crops for both kharif and rabi seasons are likely to incentivise crop diversification and support farmers' income. It hoped that this step will further encourage healthy rabi sowing. According to the report, quality seed availability surpassed the requirement by 30.9 lakh quintals of seeds, ensuring ample supply for sowing.
As of November 6, 2024, paddy procurement reached 161.0 lakh metric tonnes, benefiting 14.79 lakh farmers from the ongoing KMS procurement operations. The record Kharif food grain production with increased MSPs expected to further strengthen the rural economy.
"Early November trends signaled moderation in key food prices, though geopolitical factors may continue to impact domestic inflation and supply chains," said the report.