Rising tomato prices received widespread attention as it has taken toll on households' budgets: RBI
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Mumbai: A Reserve Bank article on Monday said rising tomato prices have received widespread attention as it has taken a toll on households' budgets and the spillover effect of the spike in the price of the kitchen staple on other commodities remains a "major concern".
In recent weeks, the price of tomatoes has soared to up to Rs 250 per kilogram, mainly due to crop damage.
Amid the steep rise in retail prices, the Centre has started selling tomatoes at Rs 80 per kg in a bid to provide relief to people.
"The recent spike in tomato prices on account of crop damage due to inclement weather and pest attacks in the major production belts has received widespread attention as it has taken a toll on households' budgets," said an article on 'State of the Economy' published in the Reserve Bank of India's July bulletin.
The article also pitched for improving supply chains to contain overall inflation volatility.
The price of tomatoes has started coming down and as per government data, on Monday, the all-India average price of the kitchen staple stood at nearly Rs 120 per kg.
According to the article, historically, tomato prices have been an important contributor to volatility in overall inflation. Its volatility also gets transmitted to prices of other vegetables in both retail and wholesale markets.
"Tomato, being a highly perishable item with a very short crop duration, exhibits considerable seasonal variation in prices but these episodes are short lived," the article authored by a team lead by RBI Deputy Governor Michael Debabrata Patra said.
The central bank, however, said the views expressed in the bulletin are of the authors and do not represent the views of the RBI.
According to a section titled 'Five Facts About Tomato Prices' in the article, the average duration of a high price episode, derived from the Markov Chain transition probability matrix, shows that prices stay above Rs 40 for an average duration of 2.6 fortnights whereas prices remain below Rs 20 for an average duration of 10 fortnights.
"Spillovers from tomato price spikes to prices of other commodities and unhinging inflation expectations remain a major concern," it said.
Increasing amplitudes of price spells over the years calls for improving the supply chains to contain overall inflation volatility, it added.
Further, the article said that food price spikes typical of the onset of the monsoon drove up headline inflation in June, corroborating the Monetary Policy Committee's (MPC) view that the fight against inflation is far from over and monetary policy has to stay the course on the arduous last leg of the journey to align inflation with the target.
Meanwhile, the article also said the global growth momentum appears to be stalling, especially manufacturing and investment, amidst moderating headline inflation with a stubborn core.
Market expectations of future interest rates have gone up in response to the hawkish policy stance while equity prices have flattened and bond yields have hardened.
In India, the rain deficit is rapidly closing amidst a highly cyclone-skewed distribution. Manufacturing and services activity remains in expansion albeit with some sequential moderation in June, the article said.
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UDF leaders see local body poll trends as pointer to 2026 Assembly elections in Kerala
Thiruvananthapuram (PTI): Buoyed by the strong performance of the Congress-led UDF in the local body polls, KPCC president Sunny Joseph said on Saturday that the front's results indicated the people had rejected the LDF government.
According to early trends, the UDF was leading in more grama panchayats, block panchayats, municipalities and corporations than the LDF.
The local body polls were held in two phases in the state earlier this week.
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Speaking to reporters here, Joseph said the people of Kerala had extended their support to the UDF.
"We could expose the LDF government’s anti-people stance and the people understood it. The LDF’s fake propaganda was rejected by the people. The UDF is moving towards a historic victory," he said.
He said a united effort, proper preparations, good candidate selection and hard work had resulted in the Congress and the UDF’s victory in the elections.
Asked about the prospects in the Thiruvananthapuram Corporation, Joseph said the party was studying the matter and would comment later.
LDF convenor T P Ramakrishnan said the results would be closely examined.
According to him, the government had done everything possible for the people.
"Why such a verdict happened will be examined at the micro level. People’s opinion will be considered and further steps will be taken," he said.
He added that decisions would be taken after analysing the results. "If any corrective measures are required, we will initiate them and move forward," he said.
AICC leader K C Venugopal said the results showed that people had begun ousting those who, he alleged, were responsible for the loss of gold at Lord Ayyappa’s temple.
"This trend will continue in the Assembly elections as well. It is an indication that the people are ready to bring down the LDF government," he said.
Venugopal said the UDF had registered victories even in CPI(M) and LDF strongholds.
"I congratulate all UDF workers for their hard work. Congress workers and leaders worked unitedly," he said.
Referring to remarks made by Chief Minister Pinarayi Vijayan against the Congress on polling day, Venugopal said the voters had responded through the verdict.
"I do not know whether the chief minister understands that the people are against him. Otherwise, he does not know the sentiment of the people. The state government cannot move an inch further," he said.
He said the results indicated a strong comeback for the UDF in Kerala.
Asked whether the Sabarimala gold loss issue had affected the LDF in the local polls, Venugopal said the CM and the CPI(M) state secretary did not take the issue seriously.
"We took a strong stand on the matter. The BJP played a foul game in it," he alleged.
On the BJP's role in the local body elections, Venugopal alleged that the party operated with the CPI(M) 's tacit support.
"The CPI(M) supported the central government on issues such as PM-SHRI, labour codes and corruption in national highway construction. The CPI(M) is facing ideological decline, and the state government’s policies are against the party’s own decisions," he said.
Meanwhile, LDF ally Kerala Congress (M) leader Jose K Mani said the party could not win all the wards it had expected in the elections.
He congratulated winners from all parties and said the party would closely examine the losses and identify shortcomings. "Later, we will take corrective measures," he added.
Senior Congress leader and MP Rajmohan Unnithan said the trends in the local body elections indicated that the UDF would return to power in the 2026 Assembly elections.
"We will win 111 seats as in 1977 and return to power in 2026. The anti-government sentiment of the people is reflected in the elections," he said.
Unnithan said the people were disturbed and unhappy with the present government.
"The trend indicates the end of the LDF government," he added.
CPI(M) MLA M M Mani said the people had shown ingratitude towards the LDF despite benefiting from welfare schemes.
"After receiving all welfare schemes and living comfortably, people voted against us due to some temporary sentiments. Is that not ingratitude," he asked.
Mani said no such welfare initiatives had taken place in Kerala earlier.
"People are receiving pensions and have enough to eat. Even after getting all this, they voted against us. This is what can be called ingratitude," he said.
Muslim League state president Panakkad Sayyid Sadiq Ali Shihab Thangal said the results were beyond expectations.
"The outcome points towards the Secretariat in Thiruvananthapuram, indicating that a change of government is imminent. We are going to win the Assembly election," he said.
