Why in news
- The Finance Ministry's Monthly Economic Report noted a structural shift in food inflation from traditional cereals towards protein-rich items, processed foods, and edible oils.
Compositional Shift in Inflation
- Headline food inflation is increasingly driven by non-cereal items including pulses, milk, meat, processed items, and edible oils rather than traditional staples like rice and wheat.
- Rising household disposable incomes have shifted consumption patterns towards dietary diversification (protein and demand for processed foods), creating persistent demand-pull pressures.
Supply-Side Vulnerabilities
- Persistent El Niño conditions pose recurring risks to rainfed crops, domestic oilseed yields, and pulse production.
- High import dependence on crude palm oil, soybean oil, and sunflower oil transmits international commodity price volatility directly to domestic food indices.
Key terms
Headline Inflation
The raw inflation figure reported through the Consumer Price Index (CPI) that includes volatile commodities like food and energy.
El Niño
An ocean-atmosphere climate phenomenon characterized by unusually warm sea surface temperatures in the central and eastern tropical Pacific Ocean, frequently causing monsoon deficits in India.
Prelims facts
- Food and Beverages hold a weight of 45.86% in the current Consumer Price Index (Combined).
- El Niño events generally correlate with suppressed southwest monsoon rainfall in South Asia.
Mains discussion
- Discuss the structural causes of persistent food inflation in India beyond supply-side agricultural bottlenecks.
Source: Economic Times
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
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2024 · Q2 · GS III · 10 marks
What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of RBI to control this type of inflation. -
2026 · Q17 · GS I · 15 marks
Analyze the major drivers of human-induced land-use changes in India and their geographical consequences. -
2022 · Q20 · GS II · 15 marks
Clean energy is the order of the day.' Describe briefly India's changing policy towards climate change in various international fora in the context of geopolitics. -
2020 · Q67 · General Studies · 2 marks
Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI does. 3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. Which of the statements given above is/are correct? -
2016 · Q18 · GS I · 12 marks
Present an account of the Indus Water Treaty and examine its ecological, economic and political implications in the context of changing bilateral relations.