A recent CRISIL report underscores the influence of escalating vegetable and foodgrain prices, coupled with erratic monsoons, on India's inflation trajectory this fiscal year.
Vegetables, with a 15.5% weight in the food index, significantly affect food inflation. The report stresses that such unpredictability disrupts consumer and farmer interests and complicates short-term policy decisions.
Factors like unpredictable weather, pest attacks, and demand-supply gaps contribute to this instability. Although vegetable production has risen, it lags behind the growing demand due to factors like population growth and shifting dietary preferences. The report suggests the necessity for more stable pricing mechanisms for vegetables in India.