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Discuss the effect of global price movements on food inflation in India.

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Topic:   Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

5. Discuss the effect of global price movements on food inflation in India. (250 words)

Reference: Indian Express

Why this question:

The article brings out the fact that Retail and wholesale food inflation rates for December 2019 were the highest since November 2013 and December 2013 respectively, and then provide a detailed analysis of factors affecting the food inflation in the country.

Key demand of the question:

Discuss in detail the effect of global price movements on food inflation in India with suitable justifications.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Briefly explain the prevailing conditions of food inflation in the country.

Body:

Quote statistics/facts suggesting food inflation in the country. Discuss the major factors responsible for it – local and global factors with greater emphasis on the latter. Quote and discuss the global factors such as – Coronavirus, global crude prices etc. Discuss the possible uncertainty in the trend and measures to address and mitigate it.

Conclusion:

Conclude with solutions for both long term and short term to overcome the persistent food inflation.