Daily RC and Vocabulary_ 14th March

Price pressures

The new series of the Consumer Price Index (CPI), the second data release of which was issued on Thursday, does not yet have enough historical data for robust comparisons, but does include enough information to provide clues about the future. Retail inflation in India quickened to a 10-month high of 3.2% in February 2026, largely driven by food inflation and precious metal prices. This rise is something that the government should take note of early, avoiding any complacency that might have crept in due to the low inflation levels of the last year or so. Food has a lower weight in the new series as compared to the old one, but is nevertheless a major driver of inflation with a 36.75% weight in the overall CPI. Inflation in food and beverages rose to 3.35% in February from 2.1% in the previous month, driven by quickening price levels in the meat, oils, and fruits and nuts categories. Notably, inflation in tomato prices stood at more than 45%. Thankfully, this was accompanied by a contraction in prices of the two other staples — onions and potatoes — by 28% and 18%, respectively. A large part of the low inflation last year was due to a statistical base effect that is now gone. Looking ahead, there are various factors that could result in rapidly rising food inflation. The first is that climate scientists are predicting the return of the El Niño effect in the middle of the monsoon this year. A weak monsoon will naturally raise food prices. The second impact will depend on how long the conflict in West Asia continues. Sustained natural gas supply constraints will hurt fertilizer production, affecting food output and, eventually, prices. The other factor that has driven inflation up, and which will likely remain a major driver in the near future, is the price of gold and silver. Gold jewellery saw inflation rise to 48.2% in February from an already blistering 46.8% in January. Inflation in silver jewellery stood at more than 160% in both January and February. With global uncertainty and anxiety skyrocketing, the demand for safe-haven precious metals is not going to let up any time soon. Rising oil prices and LPG and LNG shortages are already raising input prices for industry, which will eventually be passed on to consumers. The Reserve Bank of India’s Monetary Policy Committee has a tough job in its next meeting in April. Inflation is being driven by supply constraints, so trying to reduce demand by raising interest rates will not only have a minimal impact on inflation but could also further hurt growth when fuel constraints are already impacting it. The onus lies with the government and its efforts to expedite alternative sources of fuel.

Top 10 Vocabulary Words from the Editorial

1. Complacency
   Meaning: A feeling of self-satisfaction that prevents awareness of potential danger or problems.
   Example:
   The government should avoid complacency even if inflation appears low for a short period.
2. Quickened
   Meaning: Increased in speed or intensity.
   Example:
   Retail inflation quickened in February due to rising food prices.
3. Contraction
   Meaning: A decrease or reduction in size, value, or quantity.
   Example:
   There was a contraction in onion and potato prices during the month.
4. Blistering
   Meaning: Extremely intense, rapid, or severe.
   Example:
   Gold prices recorded blistering growth amid global uncertainty.
5. Skyrocketing
   Meaning: Increasing very rapidly.
   Example:
   Demand for gold is skyrocketing because investors seek safe assets.
6. Safe-haven
   Meaning: An investment considered secure during times of economic instability.
   Example:
   Gold is widely regarded as a safe-haven asset during financial crises.
7. Constraints
   Meaning: Limitations or restrictions that prevent something from happening.
   Example:
   Supply constraints in natural gas could affect fertilizer production.
8. Complacent
   Meaning: Showing smug or uncritical satisfaction with oneself.
   Example:
   Policymakers should not become complacent about inflation trends.
9. Onus
   Meaning: Responsibility or obligation to do something.
   Example:
   The onus lies on the government to ensure stable energy supplies.
10. Expedite
    Meaning: To make a process happen faster or more efficiently.
    Example:
    The government must expedite the development of alternative energy sources.

5 High-Level Reading Comprehension MCQs based on the editorial “Price Pressures”