RURAL AND URBAN INFLATION IN MAHARASHTRA: A COMPARATIVE STUDY (2014–15 TO 2024–25)
DOI:
https://doi.org/10.65327/ans.v10i1.2576Keywords:
consumer price index, rural inflation, urban inflation, Maharashtra, food prices, price stabilityAbstract
Rural and urban areas are affected by inflation differently due to differences in consumption patterns, expenditure priorities, and exposure to commodity price fluctuations, which affect household purchasing power and living standards. Recognizing those differences is fundamental for the formulation of efficient policies on how to manage inflation and encourage economic stability. This study compares and analyzes rural and urban Consumer Price Index (CPI) inflations for Maharashtra state that includes ten annual observations with financial-year labels from 2014–15 to 2023–24, with the simultaneous application of the official averaging conventions applicable to some of the observations during the Covid period and the use of provisional data for April-December 2024, based on the National Statistical Office (NSO) official statistics and the Economic Survey of Maharashtra. To analyze the inflation trends, volatility, co-movement and rural–urban disparities, descriptive statistics, graphical trend analysis, paired-samples t-test and Pearson correlation were used. Results showed that mean rural inflation rate was 5.31% and urban inflation rate was 4.93% with a mean difference of 0.38 percentage point. No statistically significant difference was found, t(9) = 0.66, p = .528, and the effect size of this difference was small (Cohen's dz = .21) as indicated by the paired comparison. There were significant inter-annual fluctuations with higher rural inflation in 2015–16 and higher urban inflation in 2018–19. The rural inflation for April-December 2024 was 3.9% while for urban was 4.5% in provisional data. These patterns are partly due to differences in the composition of the CPI baskets, specifically in rural areas, the composition of food and in urban areas, the composition of housing and services. The study attempts to highlight the need for rural and urban inflation to be monitored separately in order to formulate specific economic policies.
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