Can inflation swing votes in state elections?
NEW DELHI : Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram are headed for assembly elections amid varying retail inflation numbers. Rajasthan’s at 6.53% is above the RBI’s upper tolerance band. Mint explains the relevance of inflation to the elections.
Chhattisgarh had the lowest retail inflation in September at 1.98% while Madhya Pradesh reported 3.67%. Rajasthan (6.53%) and Telangana (5.97%) recorded the highest among the five states. Inflation data for Mizoram was not available.
In comparison, the overall Indian Consumer Price Index (CPI)-based inflation eased for the second consecutive month in September to 5.02%. A moderation across the food and core categories helped bring the overall inflation down during September. Base effects from September 2022, when consumer prices rose 7.4%, also helped ease the inflation rate.
Price trends vary across states based on consumption patterns, which are unique for each state. The weight of items that make up the consumer price index (CPI) varies. Inflation at the state level depends on various local factors like demand, supply, state policies, infrastructure, consumption, and incomes.
Typically, states that have rolled out high subsidies may see lower inflation, while those with high duties on petroleum products could see higher inflation, as fuel makes up a large part of the index. The efficiency of a state’s public distribution system also impacts prices, as states provides a number of items through their PDS system. When food prices rise, states that depend more on farm revenue—like Rajasthan and Telangana—tend to report higher inflation.
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