26 states, UTs faced 6%-plus CPI inflation in April

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Consumer Price Index (CPI) data for April, released on May 12, showed India's headline retail inflation rate hit a 95-month-high of 7.79 percent. This was the fourth consecutive month in which inflation came in higher than the upper limit of the Reserve Bank of India's (RBI) 2-6 percent mandate.

However, in several states and union territories (UTs) prices have risen at a faster pace for a longer period.

In Maharashtra, CPI inflation has been above 6 percent for five consecutive months and in Haryana, it has been six straight months of 6 percent-plus inflation. Returning to western India, Dadra and Nagar Haveli is in the midst of a nine-month-long stretch of 6 percent-plus inflation. Retail inflation has averaged 8.3 percent in Dadra and Nagar Haveli over the last nine months—the highest of any region in India.

According to the CPI data, retail inflation in April exceeded 6 percent in 26 –or 74 percent–of 35 states and UTs for which data was available. The rate was the highest in West Bengal, at 9.12 percent. Madhya Pradesh was 2 basis points behind at 9.10 percent, with Telangana rounding off the 9 percent-plus group at 9.02 percent.

At the other end of the spectrum was Manipur, with retail inflation of 2.29 percent. The only other state with inflation close to 4 percent in April was Goa, with 4.01 percent.

While the RBI's mandate is for the all-India inflation rate, disparities at the state-level are likely to exist.

Higher fuel prices have raised inflation for energy-related items and indirectly increased costs for items that are transported. If transportation costs are sufficiently high, the supply of goods to certain regions can be a challenge.

However, inflation in two regions—with the exception of one state in each —was below the national average of 6.2 percent over the past six months.

In southern India, only Telangana's average retail inflation was more than 6.2 percent over the past six months. In the northeast, only Mizoram had inflation of more than 6.2 percent over the same period.

As for elevated inflation on a sustained basis, certain states and UTs have fared worse than others.

As the chart shows, CPI inflation averaged more than 6 percent for three successive quarters in four regions from different corners of India starting July-September 2021—Dadra and Nagar Haveli, Sikkim, Telangana and Jammu & Kashmir. The statistics ministry provides combined data for the union territories of Jammu & Kashmir and Ladakh.

All-India CPI inflation averaged 5.1 percent, 5 percent, and 6.3 percent in the past three quarters. For the RBI, if average CPI inflation at the national level stays outside the 2-6 percent mandate for three consecutive quarters, it will be considered a failure for the central bank.