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For diverse Indian cuisines, inflation has now become a common ingredient, whether it is a quintessential thali of misal pav from Solapur or curd rice from Tirupati. Over the past two years, as the pandemic forced policymakers to ignore inflation to revive sluggish economies, price pressures kept building up, turning into a global headache.

In India, even as seasonal declines in vegetable and cereal prices offered some relief from time to time, the rising cost of edible oils, spices, dairy products, pulses, chicken, egg, and fish made staple meals costlier across the country, showed data collected by a team of Mint reporters from across India over the past week. The findings are based on interviews with multiple retailers and vendors in various cities.

Mapping India's inflation story
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Mapping India's inflation story

Staple meals in these cities have seen the cost of their ingredients soar by more than 30% in some cases in the past two years, even as incomes have declined or remained little changed for a vast section of the population. Turmeric rose the most in our selection of ingredients—as much as 59%, or 26% per year, in Patna, making the daily lunch dish of rice-dal-bhujiya an expensive affair.

The data shows that some of India’s most popular staple meals may have gotten costlier faster than overall retail prices, which rose at an annual rate of 6.2% between March 2020 and March 2022, according to government data.

While consumers have swallowed the price increases so far, their misery is getting worse with the relentless rise in prices of food items. The pain is especially acute for the poor, who spend a substantial portion of their earnings on food. With inflation testing the limits of consumer tolerance, many Indians are now slashing discretionary spending, which is starting to reflect in lower demand for goods and services.

In Mint’s survey, the pre-pandemic and current prices quoted by vendors have been converted to the annual inflation rate for this analysis. The comparison is with pre-pandemic days and not with a year ago to eliminate lockdown-induced volatility.

A typical lunch in Assam’s Silchar includes fish, whose price has risen on an average annual rate of 15% since pre-pandemic days; mustard oil, for which the annual inflation was 22%; and rice, whose inflation has been 2%.

Compared to last year, too, vendors pointed to a marked increase in prices, worsened in recent months by the Russia-Ukraine war and higher fuel prices.

“Year to date, edible oil has seen a jump of 20-30 per litre. The prices of vegetables (cauliflower, cabbage, capsicum, etc.,) have also seen around a 10-12% surge recently due to the rise in transportation cost, triggered by fuel hike," said Pranab Paul Choudhury, president, Silchar Foodgrain Merchant Association.

In comparison, a plate of aloo paratha and curd, a favourite breakfast in New Delhi, hasn’t seen a similar sharp rise, thanks to lower potato prices, which are being sold at 17 per kg now from 24 during pre-pandemic days. Tomato and onion prices are lower, too, but these failed to offset the rise in other ingredient prices: flour, used to make the dough, has gotten dearer by 10% per year.

A selection of common spices across India has gotten dearer by 15% annually since early 2020, while the same figure for salt is 12%.

These ground reports are reflected in inflation data as well. A Mint analysis of inflation data showed that food and beverages made up nearly 50% of the total inflation in March, rising from less than 20% six months ago. And the situation is unlikely to improve anytime soon. The food and beverage group has a weight of 46% in the CPI basket.

“Amid the current bout of war-induced global supply readjustments and commodity price escalation, India is likely to witness a sizeable delta on food inflation in 2022-23," said QuantEco in a recent note.

Consumers can hope for some respite from soaring food prices as the India Meteorological Department has predicted a normal monsoon, increasing the possibility of a bountiful harvest. In addition, the Reserve Bank of India has said it would shift its focus to containing inflation from supporting growth.

Niti Kiran, Rishika Agarwal, Ajith Kumar S., Vineetha Sampath, Shubhobrota Devroy, Priyanka Gawande, Sohini Bagchi, Suneera Tandon, Harsha Jethmalani and Dilasha Seth contributed to the story.

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