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Agricultural perspectives: Will there be price pressures
Oct 09: Normally higher production should result in lower increase in prices based on laws of economics. However, this may not be so this time as there has been an aggressive increase in the MSPs of various crops.
8Intuitively it may be seen that such increases would have a sharper impact on the CPI compared with the WPI as these commodities have a weight of around 4% in WPI (with the major rabi crops having weight of around 1.7%) and close to 7% in CPI (which increases by another 3-3.5% with the rabi crops included).
8This excludes derived products from these basic crops.
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