WHY IN NEWS:
As retail inflation ebbs, government must move to improve farmer income
Economic Indicators & RBI Policy
- Inflation Trends: India’s retail inflation dropped to 3.34% in March, a near six-year low.
- RBI’s Monetary Policy Response: Consecutive repo rate cuts (Feb & April) from 6.5% to 6% to boost economic growth.
- Impact on Banking Sector: Lower repo rates leading to reduced interest rates on bank loans.
- Global Trade Uncertainty: U.S.-led tariff concerns affecting Indian exports.
Food Inflation & Rural Economy
- Food Inflation Decline:Fell to 2.69% due to price contraction in vegetables (-7.04%), eggs (-3.16%), pulses (-2.73%).
- Farmer Distress:Falling prices leading to lower incomes; instances of farmers discarding produce due to market crashes.
- Post-Harvest Losses: Annual loss pegged at ₹1.52 trillion due to storage & transportation issues.
- Rural Consumption & Economic Gap: Rural per capita expenditure ₹4,122 vs urban ₹6,996, reflecting a significant income disparity.
Industrial & Employment Outlook
- Industrial Production:Easing inflation may help sluggish industrial growth.
- Investment Climate:Lower lending rates could boost investment but investor confidence remains low.