West Bengal, Uttar Pradesh and Assam saw over 8% March retail inflation

CPI inflation was more pronounced in rural areas from January in FY22

Price rise is everywhere but it is particularly bad in three states — West Bengal, Uttar Pradesh, and Assam —which have shot past the national average on this metric.

They saw an over 8 per cent retail inflation rate in March against 6.95 per cent in the country as a whole.

The consumer price index-based (CPI-based) inflation rate in West Bengal was 8.85 per cent in the last month of 2021-22.

Those in rural areas of the state bore the brunt of price rise, which crossed double digits there at 10.43 per cent in March, close to two percentage points above 8.60 per cent in the previous month.

On the other hand, urban areas in the state saw the inflation rate declining to 7.10 per cent from 7.23 per cent in February.

While no other states saw rural inflation in double digits, villages in Uttar Pradesh and Telangana saw more than 9 per cent — at 9.54 per cent and 9.40 per cent, respectively — in March. This was higher than the 7.97 per cent and 7.47 per cent, respectively, in rural areas of these two states in the previous month.

Urban areas of West Bengal had a lower inflation rate than those in Bihar and Maharashtra in March. Cities in Maharashtra saw 7.25 per cent and those in Bihar 7.12 per cent, considerably higher than the 6.81 per cent 5.86 per cent, respectively, in the previous month.

It is only the combined Union Territories of Jammu and Kashmir, and Ladakh, or the erstwhile state of Jammu and Kashmir, which saw an inflation rate of at least 6.50 per cent since June, from which the state-wise data is available.

Since January, CPI inflation changed track and became more pronounced in rural areas. For instance, it was 7.66 per cent in rural areas in March, higher than the 6.12 per cent in urban parts; in February it was 6.38 per cent in rural areas, higher than the 5.75 per cent in cities; and 6.12 per cent in January, more than the 5.91 per cent in urban areas.

This was probably also the reason for the combined inflation to be more than 6 per cent in the last three months of FY22. Rural areas have a slightly higher weighting in the CPI at 53.52 per cent than urban areas at 46.48 per cent.

However, this is not evenly distributed across states. Urban areas in states such as Gujarat, Tamil Nadu, Goa, Telangana, and Delhi, and the Union Territories of Puducherry and Chandigarh have a higher share in the CPI than their rural parts do.

ICRA Chief Economist Aditi Nayar said: “A shift of labour between urban and rural areas in the last two years has also injected volatility into demand dynamics.”