Poll-bound Haryana’s inflation higher, J&K, Maharashtra’s lower than national average

Haryana has higher inflation rate than national average as it heads into elections

With elections looming in Haryana, Jammu and Kashmir and Maharashtra, a Moneycontrol analysis found a notable divergence in inflation trends, which could potentially influence voters and sway the outcome of the polls.

In August, Haryana's inflation rate was at 4.1 percent, faster than the national average of 3.7 percent, government data released on September 12 showed. Prices rose at a slower 3.3 percent pace in Jammu and Kashmir, which will go to the polls along with Haryana.

Maharashtra, which is due for elections later this year, too, had a slower inflation rate of 3.3 percent.

Voting for the 90-member Haryana assembly will be held on October 5, while Jammu and Kashmir polls will be held over three phases on September 18 and 25 and October 1.

The September 12 data shows that inflation quickened to 3.7 percent in August from the previous month's 3.6 percent, as food inflation rebounded to 5.7 percent.

With rising prices eroding purchasing power and affecting household budgets, inflation has become a critical issue for voters.

Haryana looks at a disadvantage if one looks at the average inflation rate since the start of the year. The state has had one of the highest inflation rates since the beginning of the year, with consumer price rise averaging 5.5 percent in the first eight months of 2024.

The national inflation rate was a percentage point slower at 4.6 percent, while that for Jammu and Kashmir and Maharashtra was 4.1 percent.

Among the larger states, only Odisha, Assam and Bihar have a higher inflation rate than that of Haryana. Odisha is the only state to over 6 percent monthly inflation between January and August.

One reason for higher inflation could be rising food prices, which affect rural areas more than urban centres. The share of food in the rural basket, at 47.3 percent, is 60 percent higher than the 29.62 percent for urban areas.

Rural inflation has outpaced urban inflation for 14 straight months. Since the start of the year, the average gap between rural and urban inflation has been 1 percent.

Bihar’s inflation folly

While Bihar, which has to hold elections by early 2025, faces a tough road ahead to balance its population's inflation expectations. The gap with national inflation has been widening.

The state had one of the highest inflation rates in the country at 6.6 percent compared with 5.9 percent in August. While India’s inflation increased by 0.05 percentage points over the month, it jumped 0.5 percentage points for Bihar.

At 7 percent, Tripura had the highest inflation rate in August.