Tax on the poor: On inflation disproportionately affects the economically weaker sections
Tax on the poor: On inflation disproportionately affects the economically weaker sections The latest retail inflation data from the National Statistical Office is a sobering reminder that accelerating price gains still remain the single biggest challenge to policymakers as they try to steer Asia’s third-largest economy to a more durable recovery from the pandemic-induced slump. Inflation based on the Consumer Price Index (CPI) quickened in August to a provisional 7%, from 6.7% in July, as the pace of gains in food prices as measured by the Consumer Food Price Index accelerated by a sizeable 93 basis points to 7.62%, from July’s 6.69%. And rural consumers bore a disproportionately higher burden: with month-on-month changes in both food prices and overall inflation appreciably greater at 0.88% and 0.57% respectively, compared with the 0.50% and 0.46% rates of urban inflation. Of particular concern is that inflation in the prices of cereals — staple grains in every household — surged...