Poll-bound Gujarat, Himachal on different inflation trajectories in 2022

Gujarat has since February consistently witnessed higher retail price inflation than national average

Gujarat and Himachal Pradesh, which are set for elections, have taken different paths in their inflation trajectory February to March this year compared to the all-India average. Himachal will hold elections on November 12, as dates for Gujarat assembly polls are awaited.

Gujarat has since February consistently witnessed higher retail price inflation rate than the national average, till the latest figures in September. Himachal Pradesh has seen consistently lower inflation rates than the all-India figures from March onwards, showed official data.

Gujarat’s consumer price index (CPI)-based inflation rate was 5.95 per cent in January 2022, against the national average of 6.01 per cent. However, Himachal Pradesh saw the rate significantly higher at 6.72 per cent.

For Gujarat, the course has changed since then. It had inflation at 6.43 per cent in February, much higher than the national average of 6.07 per cent. This trend still continued till the latest available data for September.

The inflation rate in Gujarat came down to 7.95 per cent in September from 8.22 per cent in the previous month, while the rate rose to 7.41 per cent from 7 per cent over this period. However, the inflation rate was much higher in Gujarat than that of the national level in both these months.

Himachal had higher inflation at 6.47 per cent than the national average at 6.07 per cent in February, but the trend changed since then. So much so that the rate stood at below five per cent in July, August and September against over six per cent at all-India level.

The rate stood at the Reserve Bank of India's upper tolerance band of six per cent for the ninth month in a row in September. In Gujarat too, the inflation rate remained over six per cent in these months, except for January. However, Himachal had an inflation rate below six per cent from May onwards or for five consecutive months till September.

The inflation rate has been higher in rural parts of the country than in urban areas for the first nine months of the current calendar year except for May. In May, urban and rural areas had the same rate at 7.08 per cent.

Gujarat also had higher inflation in villages than in urban parts in most of these months. The only exceptions were May and June. Rural areas of Gujarat had the rate at 7.30 per cent against 7.50 per cent in May. The next month too, rural areas saw an inflation rate at 7.45 per cent compared to 7.51 per cent in urban areas.

On the other hand, it was urban areas which saw higher inflation rates than rural areas had in most months of the first nine months of the current financial year. This was the case March onwards. For instance, the rate stood at just 4.24 per cent in rural areas of Himachal, which was 151 basis points lower than 5.76 per cent in urban areas in September.