Check out how much inflation went up during UPA rule

Two things the United Progressive Alliance will find difficult to shrug off are the numerous scams that happened over the last nine years and the high prices. While the responsibility for scams squarely falls on the government, the entire blame for high inflation cannot be put on it.

Various factors like global prices and climate change also contributed to the high prices. Nonetheless, as far as food inflation is concerned the government could have taken steps to address the supply side bottlenecks.

The graph below shows that wholesale price inflation (WPI)remained in the double digit for almost three years during UPA’s rule.

[caption id=“attachment_80005” align=“aligncenter” width=“600”]  Source: Credit Suisse.[/caption]

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Over the last two years, while the WPI has shown a declining trend, the consumer price inflation (CPI)-price rise driven by potential consumer demand and available supply-has continued to remain high. The CPIis a better indicator of inflation for guiding monetary policy decisions than WPI inflation. In fact, the RBI is also basing its policy decisions on the CPI.

Last month, India’s wholesale price-based inflation eased to a nine-month low as food and fuel prices moderated.The WPI, long regarded as India’s main inflation measure, rose 4.68 percent last month.

Though CPI has easedfor a third straight month to a 25-month low of 8.10 percent in February, there’s a long way before we praise the UPA government.

A Credit Suisse report notes that inflation is not expected to come down anytime soon to levels at which theCentral Bank can start cutting rates.