India’s growth rate in the first half of the year was the worst in the world, the International Food Policy Research Institute (IFPRI) said on Monday, as the country’s economic slowdown and the rising cost of living pushed up the countrys food prices.
The report said the country has lost almost half of its production value of vegetables over the past decade, and nearly a third of its fruits and vegetables, a measure of the value of produce grown in India, to be used in food prices, and the loss of crops is accelerating.
The country’s food prices are expected to rise by about 25% this year, to nearly $4.6bn, from $2.5bn in the same period last year, according to the report.
This will cause significant financial burden on the poor, the report said, adding that most of this burden will fall on the poorest.
The IFPI, which has published its annual food price index since 1998, has previously highlighted the impact of India’s food inflation on people’s budgets and lives, especially the cost of milk, sugar, meat and eggs.
“India is in the midst of a food price inflation epidemic, with prices rising as fast as incomes,” IFPIs director general Rakesh Jena said.
“These food inflationary pressures have created huge hardships for the poor.
The IFP IAS estimates that nearly 75% of households in India do not have enough money for basic expenses like food.”
India’s economic growth has been slowing in recent years and is now the worlds third-largest economy behind China and the United States.
The World Bank, the IMF and the World Health Organization all put the growth in India’s economy at 7.3% last year.
India’s gross domestic product is expected to grow at an annualised rate of 7.5% this fiscal year, its slowest pace in more than a decade, according an International Monetary Fund (IMF) forecast.
The growth will be boosted by a rise in investment spending, a rise of exports and a reduction in import costs.
India has lost about 4.5 million jobs since 2008, the most in the industrialised world, according a World Bank report in November.
The government has blamed the downturn on a weak and volatile global economy, which is now in the grip of the worst global recession since the Second World War.
India, which joined the World Trade Organisation in 2001, is one of the world s biggest exporters of grain, cotton, wheat and other agricultural commodities, according the World Bank.
The food price rise and other issues, such as soaring fuel prices, the worsening of the rupee and the slowdown in the global economy could hurt India’s export growth in the near term, said IFS managing director Ajay Pandey.
India is also likely to miss the target of bringing down inflation, as its economy has been growing at 6.8% a year on average since the onset of the global financial crisis in 2008, but that is expected have slowed down this year due to the impact on the rupees, the IFS said.