Food inflation: Supply constraints or market failure?

Food inflation has been haunting India for nearly a decade now, averaging 12.2% in the last five years alone. It is concerning that even an 8.3 percentage point drop in nominal income (per capita) growth since FY11 helped sober overall food inflation to just 11% monthly over April 2010-March 2013. In FY14, it shot up to 13% each month, on average, notwithstanding that nominal income stagnated while agriculture grew an outstanding 4.6%!

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