New Delhi: Increase in the minimum support price for rabi crops will have minimal impact on retail inflation, economists said. Based on the weight of these commodities, the MSP hike will result in a 10-basis point increase in the Wholesale Price Index and a 30-basis point increase in the Consumer Price Index , assuming other variables remain constant, said DK Pant, chief economist at Indian Ratings and Research.
" Wheat is a key ingredient in products like maida, suji, noodles, bread, and biscuits, which together account for 0.23% of CPI basket. Considering this, the impact on CPI could rise to around 32 basis points," he added.
While benchmark market prices may rise slightly when the MSP is announced, the overall effect is limited, said Madan Sabnavis, chief economist at the Bank of Baroda.
The four crops, wheat, chana, mustard, and masoor, have a weight of almost 4.5% in CPI, he added. "If the entire MSP increase were reflected in final prices, the maximum impact on CPI would be about 0.27%. However, this is mainly for wheat, and the effect on other crops may vary, resulting in an overall inflationary impact estimated at 0.18-0.20% for the year".
" Wheat is a key ingredient in products like maida, suji, noodles, bread, and biscuits, which together account for 0.23% of CPI basket. Considering this, the impact on CPI could rise to around 32 basis points," he added.
While benchmark market prices may rise slightly when the MSP is announced, the overall effect is limited, said Madan Sabnavis, chief economist at the Bank of Baroda.
The four crops, wheat, chana, mustard, and masoor, have a weight of almost 4.5% in CPI, he added. "If the entire MSP increase were reflected in final prices, the maximum impact on CPI would be about 0.27%. However, this is mainly for wheat, and the effect on other crops may vary, resulting in an overall inflationary impact estimated at 0.18-0.20% for the year".
You may also like
Haryana: Husband started doing this disgusting thing with his wife in front of his son, when the son tried to stop him, he did the same with the son too....
US charges ex-Indian intelligence official in foiled Sikh separatist Gurpatwant Singh Pannun murder plot
Cody Gakpo makes bullish Liverpool trophies prediction under Arne Slot
A Hearty Breakfast Trail In Mumbai- 7 Iconic Spots In Bombay For Perfect Start To The Day
Mike Tindall's scathing one-word remark reveals what he really thinks about Prince Harry