National Statistical Office has not compiled the retail inflation figure for May due to the coronavirus lockdown. This is the second month in a row as the government had not released retail inflation, calculated on the basis on Consumer Price Index, for the month of April too.
The price data are usually collected from 1,114 urban markets and 1,181 villages all over India through personal visits by field staff of Field Operations Division of NSO on a weekly roster. With the lockdown in effect during May 2020, NSO could get price data from 987 urban markets and 836 villages for commodities which were available and being transacted via officials deputed at 200 locations across the country.
The NSO field staff supplemented the price data with their personal purchases at neighbourhood outlets due to travel restrictions during lockdown, the agency stated.
"In view of the preventive measures and announcement of nationwide lockdown by the government to contain spread of COVID-19 pandemic, the price collection of Consumer Price Index (CPI) through personal visits of price collectors was suspended with effect from March 19, 2020. In the month of May, 2020 also, the data has been collected, to the extent feasible, through personal visits of field staff of NSO and telephone calls from the designated outlets in selected markets... It is, however, observed that transactions were largely focused on essential purchases," NSE said in a statement released on Friday.
Considering the continued limited transactions of products during the month of May as well, the NSO decided not to release the Price Movement of sub-groups and groups of CPI, the statement further added. The statistical agency reported price information of items that were reported from at least 25 per cent of markets, separately for rural and urban sectors, and constituted more than 70 per cent weight of the respective sub-groups and groups.
The all India indices have been compiled using Direct Approach by considering a common market at the national level in both rural and urban sectors separately, the NSO further said.
For the month of May, price movement in the sub-group 'Prepared meals, snacks, sweets, etc' under 'Food & Beverages' group as well as the group 'Clothing and Footwear' was not compiled. Moreover, index for only the 'Health' sub-group under the 'Miscellaneous' group has been compiled.
"All India year-on-year inflation rates for Consumer Food Price Index (CFPI) for the month of May 2020 for Rural, Urban and Combined sector are 9.69 per cent, 8.36 per cent and 9.28 per cen, respectively," NSO said.
The Reserve Bank of India follows the retail inflation closely while forming its bi-monthly monetary policy.
"The government didn't release the headline CPI for May, while the food inflation has surged to 9.28 per cent, much higher than market expectations. Due to the lockdown there is supply side shock, the material jump in inflation is a biggest risk. However, RBI has likely said that they will aim at reviving the economy first and not worry about the inflation outlook," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.