When finance ministers were on wrong side of price curve

Over the last 25 years many finance ministers have found themselves on the wrong side of the price curve, hit by droughts, external financial crises and oil shocks.

Over the last 25 years many finance ministers have found themselves on the wrong side of the price curve, hit by droughts, external financial crises and oil shocks.

High food prices have eroded people’s savings and ability to spend. (Shutterstock)

The central bank adopted Consumer Price Index (CPI) (retail inflation) as the key measure of inflation. Earlier, RBI had given more weightage to Wholesale Price Index (WPI) for all policies.

The following line chart shows the average retail inflation in India from 1991 to 2015. It also shows the name of the finance ministers in a particular year.

The costly platter

High food prices have eroded people’s savings and ability to spend. Weather-induced supply shocks and the high international commodity prices have pinched household budgets many times over the last 25 years.

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Charts by Harry Stevens, Research by HT Business Desk