Increasing Food Prices In India After COVID-19 Era - A Food Security Approach

Food inflation in India has remained stubborn in recent years. Several proximate factors such as Increasing demand particularly arising from higher rural wages, rising agricultural cost of production, changing consumption patterns favouring protein items, increases in minimum support prices (MSPs) and droughts in certain years are believed to have led to higher food inflation. This paper examines the relevance of these factors and finds that increasing real rural wages have played the most dominant role in the determination of overall food inflation in India in the long run. In the long run, while money supply leads to a rise in the prices of both food and manufactured prices, a hike in the call rate has a negative effect only on manufactured prices. The impact of the money supply is, however, more on food prices than on manufactured prices. The present paper discusses on the impact of monetary tools on curbing food price Inflation in India. Recovering from pandemic-induced contraction, the Russian-Ukraine conflict and inflation, the Indian economy is staging a broad-based recovery across sectors, positioning itself to ascend to the pre-pandemic growth path in FY23.