Drivers and impact of food inflation in India

Bhattacharya, Rudrani; Gupta, Abhijit Sen

doi:10.1080/17520843.2017.1351461

Cited by 20 publications

(13 citation statements)

References 9 publications

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“…Hence, the increase in demand for food originated by a hike in the agricultural wage rate can be substituted by raising the productivity of each worker. A similar result is found by Bhattacharya and Sen Gupta [7] for India.…”

Section: Results Of Long-run and Short-run Estimatessupporting

confidence: 89%

“…Goyal and Baikar [15] showed that the rapid increase in MGNREGA wages when it merged with inflation boosts agricultural wages rather than the implementation of MGNREGA across India. Bhattacharya and Sen Gupta [6,7] examined the drivers of food price inflation in India over the period 2006-2013. The structural vector error correction model (SVECM) showed that agricultural wage inflation promotes food price inflation after the implementation of MNGREGS.…”

Section: Agricultural Wage and Food Price Inflationmentioning

confidence: 99%

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The impact of macroeconomic factors on food price inflation: an evidence from India

2022

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The present study investigates the impact of macroeconomic factors on food price inflation in India utilizing the monthly time series during January 2006–March 2019. The long-run relationship is confirmed among the variables using the ARDL bounds testing approach to cointegration. The coefficients of long-run estimates show that per capita income, money supply, global food prices, and agricultural wages are positively and significantly impacted food price inflation in both the short and long-run. While food grain availability has a negative and significant impact on food price inflation in both the short-run and long run. Further, the short-run estimates revealed that real exchange rate positively impacts food price inflation. However, the coefficient is insignificant in the short-run. The Granger causality estimates show that a short-run bidirectional causality is confirmed among per capita income, the exchange rate, per capita net availability of food grain and food price inflation. Further, there is evidence of unidirectional causality running from global food prices to food price inflation. However, there is no causal relationship running from money supply and agricultural wages to food price inflation in the short-run.

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Section: Results Of Long-run and Short-run Estimatessupporting

confidence: 89%

Section: Agricultural Wage and Food Price Inflationmentioning

confidence: 99%

The impact of macroeconomic factors on food price inflation: an evidence from India

2022

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“…For the purposes of this study, we use variables such as monetary policy, food inflation, transportation cost, output, exchange rate, and the world food price index. We follow the existing literature in choosing these variables (Akram 2009;Rangasamy 2011;Hammoudeh et al 2015;Bhattacharya and Gupta 2017;Bhattacharya and Jain 2019;Iddrisu and Alagidede 2020). Data on monetary policy rate, output, and exchange rate are obtained from the monetary time-series database of the Bank of Ghana.…”

Section: Datamentioning

confidence: 99%

Asymmetry in food price responses to monetary policy: a quantile regression approach

Iddrisu

Alagidede

2021

SN Bus Econ

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The dominance of food in the consumption baskets of many developing countries remains a policy challenge, as it drives overall inflation in these countries. While optimal monetary policy, theoretically, is acknowledged to provide stability in the prices of food, very little is known empirically about this effect, particularly on Africa where food is a major component of the consumption baskets. With the aid of quantile regression, we provide empirical evidence on monetary policy-food inflation nexus in the context of Ghana, an inflation targeting country with food alone constituting 43.9% of the consumption basket. We find that contractionary monetary policy is destabilizing for food prices, particularly at the 20th, 25th, 30th, 35th, 40th, and the 45th quantiles of food price distribution. In addition, whiles transportation cost and output are important drivers of food prices across the specified quantiles, exchange rate movements and changes in the world food prices are not. These findings present significant policy implications for welfare and monetary policy conduct in Ghana and many developing countries with similar food credentials in their consumption baskets.

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“…For instance, India is the largest milk producer in the world, contributing to 17 per cent of the global milk production (Rajeswaran, Naik, & Dhas, 2014). However, the large spikes observed in global milk prices do not seem to get transmitted to domestic milk prices (Bhattacharya & Sen Gupta, 2015). The Indian milk and dairy industry is highly segmented with Gujarat Cooperative Milk Marketing Federation (GCMMF) being the largest organized player in the dairy sector and the largest exporter in the country (Rajeswaran et al, 2014).…”

Section: Did Rising Demand–supply Gap Contribute To Food Inflation?mentioning

confidence: 99%

What Role Did Rising Demand Play in Driving Food Prices Up?

Bhattacharya

Gupta²

2017

South Asian Journal of Macroeconomics and Public Finance

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Average food inflation in India during the period 2006-2013 was one of the highest among emerging market economies, and nearly double the inflation witnessed in India during the previous decade. An often cited hypothesis argues that the surge in food inflation during this period was driven by rising demand for high-value food products due to higher per capita income and diversification of Indian diets. In this paper we test the validity of this hypothesis by estimating the expenditure elasticity and then calculating the aggregate demand using data from household survey conducted by the National Sample Survey Organisation (NSSO). Our results show that in recent years estimated demand has exceeded supply of all major food products, barring fruits. Moreover, empirical estimates indicate that the demand supply gap is an important driver of rise in food prices, along with other factors such as minimum support prices, global prices, fiscal deficit and agricultural wages. JEL Classification: E31; E37 and Q11

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Drivers and impact of food inflation in India

Cited by 20 publications

References 9 publications

The impact of macroeconomic factors on food price inflation: an evidence from India

The impact of macroeconomic factors on food price inflation: an evidence from India

Asymmetry in food price responses to monetary policy: a quantile regression approach

What Role Did Rising Demand Play in Driving Food Prices Up?

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