Rural inflation is higher than urban: Crisil

Rating agency Crisil Ltd on Monday said, while urban inflation fell from 9% to 5.3%, rural inflation declined from 10.1% to 6.2% in the past one year.

The gap has remained 100 basis points in the recent past, caused by higher core and fuel inflation in the rural areas, its research said.

In 2015-16, rural core inflation was 6.7% compared with 4.8% in urban.

Among sub-categories such as health, education, household goods and services and recreation and amusement have registered inflation in past financial year.

According to the report, fuel inflation in rural was 6.8%, more than two-and-a-half times the 2.7% in urban due to surging prices of cooking fuel such as dung cake, firewood and chips.

 

"Inflation in firewood and chips, used by 84% of the rural population compared with 23% of urban was 7.4%. While that in dung cake, used by close to 41% of rural households compared with just 7% in urban centres was 10.8% in the past financial year," it said.

According to the report, the data for the past five years show folks in rural areas i.e, 69 per cent of India's population have the rough end of the stick on inflation compared with their urban counterparts.

The research said the petrol prices fell 7.6 per cent in the past financial year, and diesel prices fell 11.7%. This hasn't benefited rural areas as much as urban.

"37% of urban households use petrol and 2% use diesel for their vehicles, compared with 17% petrol, and 0.8% diesel in rural households, according to data for financial year 2012-13 (latest available)," the report said.