Food inflation in India: Emerging issues

Food inflation in India has remained persistent in recent years during the period 2005–06 and it had continued to do so since. Of late high inflationary pressure particularly double digit food inflation since October 2008. Because of great concern, typically for developing countries where a large section of population is net buyer of food. The fact that people in the lowest income quartile, accounting for more than a quarter of the population, spend nearly 65 percent of their total expenditure on food commodities (GOI, 2006). Although, now a day's Indian Prime Minister introduce new concept is Demonetization its main objective is controlling the black money. This concept will be partially impact on controlling inflation as well as food inflation. Because the latest price data confirms fears about the slide in shop-end sales triggered by the unexpected ban on Rs 500 and 1000 currency notes last month. The study find out in 2016-2017food inflation will decline with demonetization. It reduces the over inflation rate was because of weak demand from households hit by a cash crunch after demonetization along with a seasonal increase in the supply of vegetables so this scenario continues decline Jan 2017 to Apr 2017. We don't know whether it is continuing or not. As a result demonetization is not a controlling measure of food inflation. It is a one of the concept of controlling the black money in a county. However, in 2011 to 2017 the average of food articles is higher than food products and all other commodities are 14.7 and 14.45 respectively. As a result food articles are the major contributors to food inflation in India. Finally the result high inflation levels can indicate high demand and weak supply response. It is very important for the government to control the inflation, that's why inflation targeting monetary policy and anti inflationary policies by the government of India need to work together.