Retail inflation data is anticipated to be revised after the most recent household consumption expenditure survey revealed that the percentage of food and cereal consumption has declined dramatically.
Food accounts for roughly 46 per cent of the consumer price index (CPI), according to the 2011-12 household consumption expenditure survey.
The most recent statistics for 2022-23, released on Saturday, indicated that overall food consumption as a proportion in rural regions has decreased from nearly 60 per cent in 1999-2000 and 53 per cent in 2011-12 to 46 per cent today, the first time it has dropped below 50 per cent.
The trend was similar in cities, with food consumption falling to 39 per cent from 43 per cent in 2011-12. This was also the first time it was under 40 per cent.
“It will need to be rebalanced to represent current consumption patterns and share of food and cereals will go down,” B V R Subrahamanyam, CEO of government think tank Niti Aayog, has said.
He predicted that food would contribute less to CPI inflation, as it had in previous years.
“This means inflation was being overstated and is probably less as food has been a major contributor to inflation,” said Subrahmanyam.
Sharp increases in food costs, as well as their influence on retail inflation, posed a challenge to the central bank.
