New Delhi – Over 1 trillion rupees were announced for households to combat inflation by at least 10 Indian states, mainly in cash transfers and electricity subsidies, according to government officials.
Food inflation, which accounts for nearly 40% of the CPI basket, rose 7.62% year on year in August compared to a revised 6.69% in July, the National Statistics Office said on Monday.
The State of Kerala distributed a package of free food items costing about 450 rupees each to over 8 million families during the Onam festival earlier this month. Also a 1,000 rupee additional rural job guarantee programme for over 500,000 workers was announced.
In the states of Punjab and Delhi, the Aam Aadmi Party recently announced 300 kilowatt hours of free electricity per household and free travel for women on state buses, while promising such measures in other states if it comes to power in state elections later this year.
The state of Rajasthan announced a job guarantee programme for urban poor as part of its relief measures for households. The state government also announced free electricity supply of 50 units of electricity every month to all households.
Many other states, including Uttar Pradesh ruled by Prime Minister Narendra Modi's Bharatiya Janata Party, have also cut electricity tariffs and announced cash transfers for poor households.
A study by the research department of the Reserve Bank of India (RBI) in June estimated that nine states in their annual budget this year said that 0.1% to 2.7% of state gross domestic product went to free items and services for citizens.
The study warned that fiscal conditions of some debt-ridden states could deteriorate in coming years due to increased spending on subsidies.
Cooking gas prices have more than doubled in the last two years, while transport costs rose more than 40%, but she said that her husband's income has remained same.
Annual consumer inflation rose to 7% in August, remaining above the tolerance band of the Reserve Bank of India's 2%-6% for a ninth straight month, and is projected to remain above 6% until March 2023.
Indian opposition political parties launched a five-month 3,570-kilometre cross-country protest march on foot earlier this month to mobilise people to seek more relief. read more
-Reuters