THE CONTEXT: The Union Minister for Finance & Corporate Affairs, presented the Economic Survey 2021-22 in Parliament on 31 January 2022. The highlights of the Economic Survey are as follows:
STATE OF THE ECONOMY
Monetary Management and Financial Intermediation
Prices and Inflation
The average headline CPI-Combined inflation moderated to 5.2 per cent in 2021-22 (April-December) from 6.6 per cent in the corresponding period of 2020-21.
Wholesale inflation based on Wholesale Price Index (WPI) rose to 12.5 per cent during 2021-22 (April to December). This has been attributed to:
Divergence between CPI-C and WPI Inflation:
This divergence can be explained by factors such as:
With the gradual waning of base effect in WPI, the divergence in CPI-C and WPI is also expected to narrow down.