Rural inflation stayed higher than urban figures for most months between March, 2019 and March, 2024, shows MoSPI data. The recent numbers too, show that since July, 2023, rural inflation always stayed higher. Data shows this was mostly owing to food prices and the pandemic. 

The Covid-19 pandemic, seems to have impacted inflation in rural India more. In 2020, during the lockdowns, rural figures stayed higher every month, except in August and December.

“During and right after the pandemic, a lot of people moved to the countryside,” notes development economist Venkatesh Athreya, commenting on the trend. “At that time, there was also a lot of supply chain disruption due to restrictions. This affected rural India more than urban spaces. This could be why inflation rose in rural areas more in 2020,” he said.

He added that indirect taxes also play a role in rising inflation and that this affects the rural population more. It is noteworthy that the food and beverages component of inflation has a higher weight of 54.18 per cent in rural inflation, while it is as low as 36.29 per cent when calculating the urban inflation.

The year 2021 began with hope when India believed that the pandemic was over. Even though there was a scarier wave of the pandemic, the restrictions weren’t much, compared to 2020. Throughout the year, except in May, rural inflation stayed lower. May was also the month when the delta wave of COVID peaked in India.

In 2022, life was almost back to normal, post-pandemic. However, inflation soared in the country, touching an eight-year high of 7.8 per cent. The Russia-Ukraine war greatly impacted global commodity prices this year. The price of global crude oil touched a peak of $120.08 per barrel on June 30, 2022. CRB commodity index started rising since February, 2022 and hit a high of 644.07 in May, 2022. As prices of wheat, edible oil and pulses soared, rural inflation too was badly hit. Between January, 2022 and February, 2023, rural numbers stayed higher every month, except May, 2022.

Addressing this concern, Sadhvi Niranjan Jyoti, Minister of State for Consumer Affairs, Food and Public Distribution, said in the Rajya Sabha at that time, “Several supply-side measures have been taken by the Government to address inflation. These include a reduction in excise duty by ₹8 per litre on petrol and ₹6 per litre on diesel on May 21, 2022, prohibition of the export of wheat products, imposition of export duty on rice, reduction in import duties and cess on pulses, maintenance of buffer stock for onion and pulses, rationalisation of tariffs on edible oils, oil seeds and inputs used in manufactured products.”

The situation stabilised between March and June, 2023. However, rural numbers started to overtake urban figures since then. This was mostly led by the vegetable price rise in 2023, especially tomato and onion at different points.

MoSPI data also shows that the CPI index of most essentials has risen quite a bit between 2019 and 2024. A few commodities that saw higher inflation include tur dal, onion, groundnut oil, moong dal and potato.

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