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Drivers and impact of food inflation in India

Author

Listed:
  • Rudrani Bhattacharya
  • Abhijit Sen Gupta

Abstract

Average food inflation in India during 2006–2013 was one of the highest among emerging market economies, and nearly double the inflation witnessed in India during the previous decade. In this paper, we analyse the behaviour and determinants of food inflation over the recent past. Our main findings include that recent surge in food inflation in India is a result of various factors. On the cost side, agricultural wage inflation is found to be a universal driver of food commodities inflation, as well as the aggregate food inflation. The contribution of agricultural wages has increased significantly in the post Mahatma Gandhi National Rural Employment Act era. Fuel inflation has a moderate impact on food inflation and the effects vary across commodities. Our analysis indicates limited role of fuel and international prices, except for in tradeables. Finally, results suggest significant pass-through effects from food to non-food and to the headline inflation.

Suggested Citation

  • Rudrani Bhattacharya & Abhijit Sen Gupta, 2018. "Drivers and impact of food inflation in India," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 11(2), pages 146-168, May.
    • Handle: RePEc:taf:macfem:v:11:y:2018:i:2:p:146-168
    DOI: 10.1080/17520843.2017.1351461
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    Cited by:

    1. Amritkant MISHRA & Ajit Kumar DASH & Amba AGARWAL, 2023. "Quest of dynamic linkages between monetary factors and food inflation in India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(635), S), pages 199-210, Summer.
    2. Ginn, William & Pourroy, Marc, 2022. "The contribution of food subsidy policy to monetary policy in India," Economic Modelling, Elsevier, vol. 113(C).
    3. Sami, Janesh & Makun, Keshmeer, 2024. "Food inflation and monetary policy in emerging economies," Journal of Asian Economics, Elsevier, vol. 95(C).
    4. Choudary Ihtasham Ali & Sami Ullah & Umar Ijaz Ahmed & Irfan Ahmad Baig & Muhammad Arqam Iqbal & Amjad Masood, 2022. "Can Food Inflation Be Stabilized By Monetary Policy? A Quantile Regression Approach," Journal of Economic Impact, Science Impact Publishers, vol. 4(3), pages 205-212.
    5. Asharani Samal & Mallesh Ummalla & Phanindra Goyari, 2022. "The impact of macroeconomic factors on food price inflation: an evidence from India," Future Business Journal, Springer, vol. 8(1), pages 1-14, December.
    6. Shashi & Rajwinder Singh & Piera Centobelli & Roberto Cerchione, 2018. "Evaluating Partnerships in Sustainability-Oriented Food Supply Chain: A Five-Stage Performance Measurement Model," Energies, MDPI, vol. 11(12), pages 1-18, December.
    7. Abdul-Aziz Iddrisu & Imhotep Paul Alagidede, 2021. "Asymmetry in food price responses to monetary policy: a quantile regression approach," SN Business & Economics, Springer, vol. 1(3), pages 1-25, March.
    8. Iddrisu, Abdul-Aziz & Alagidede, Imhotep Paul, 2020. "Monetary policy and food inflation in South Africa: A quantile regression analysis," Food Policy, Elsevier, vol. 91(C).
    9. Choudary Ihtasham Ali & Sami Ullah & Umar Ijaz Ahmed & Abd Ur Rehman & Hafiz Zahid Mehmood & Mudassar Yasin & Mohsin Raza, 2023. "Short and Long Run Effects of Monetary Policy on Food Inflation: A Study of Pakistan," Journal of Economic Impact, Science Impact Publishers, vol. 5(2), pages 146-154.
    10. Amrendra Pandey & Jagadish Shettigar & Amarnath Bose, 2021. "Evaluation of the Inflation Forecasting Process of the Reserve Bank of India: A Text Analysis Approach," SAGE Open, , vol. 11(3), pages 21582440211, July.
    11. Mrabet, Zouhair & Alsamara, Mouyad & Mimouni, Karim & Awwad, Abdulkareem, 2025. "Do supply chain pressures affect consumer prices in major economies? New evidence from time-varying causality analysis," Economic Modelling, Elsevier, vol. 142(C).

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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