Good and bad news

• India’s retail inflation dropped to a six-year low of 3.34% in March, indicating a potential increase in the Reserve Bank of India’s lending rate.

• The repo rate has been cut twice in a row, reducing it from 6.5% to 6%.

• Vegetable prices have dropped from their peak in October 2024 to 2.69% in March.

• The reduction in repo rate is causing lower interest on bank loans, potentially increasing capital flows into businesses and boosting job creation.

• However, U.S.-led tariff uncertainty is dampening investor confidence, causing exporters to seek new markets.

• The steep fall in food prices is a significant concern, as it affects farmer incomes and rural consumption demand.

• A 2022 study estimated India’s post-harvest loss at ₹1.52 trillion annually due to shortages in cold storage facilities and market inaccessibility for farmers.

• Rural consumption has been rising since the COVID-19 pandemic, but monthly per capita consumption expenditure for rural areas was ₹4,122, while in urban areas it was ₹6,996, indicating a significant gap that needs to be addressed.