Normal monsoon key but not the only factor to keep inflation under control

Developments such as Covid-induced lockdowns and the Russia-Ukraine war have also played a crucial role in keeping the inflation rate elevated

A normal monsoon plays a key role in the performance of the agriculture and allied activities sector and, consequently on food and overall retail price inflation. Many economic forecasters, including the Reserve Bank of India, make an assumption of normal monsoon while projecting inflation.

However, there are other factors such as the situation in the rest of the world, and supply shocks that could arise from reasons other than monsoon. These include Covid-induced lockdowns and the Russia-Ukraine war which have kept the inflation rate elevated.

There were several factors other than monsoon, in 2020-21 and 2022-23, that kept food and overall retail price inflation high.