Factors of inflation and mitigating measures on consumption pattern of rural household’s of Chhattisgarh plains

Introduction

Inflation is a persistent rise in the general price level of goods and services in an economy over time. While it affects all sections of society, its impact is often more pronounced among rural households with limited income buffers and fewer opportunities to hedge against rising prices. Inflation is a widespread issue affecting countries worldwide, leading to prolonged instability. It refers to the rate at which prices rise over time, often caused by imbalances in money supply and demand, increased income, production costs, or taxes. As inflation grows, the value of currency decreases, reducing purchasing power. This has a devastating impact on households, particularly low-income families, as rising prices for essential goods push them further into poverty, eroding their standard of living. The high level of inflation causes instability in an economy because money does not hold its value for a long time. Workers therefore have a higher need for better remuneration to cover up the higher costs of living because prices of goods and services are increasing every day. (Mankiw, 2020; Blanchard and Johnson, 2017; FAO, 2022) [4,1,2] . The state's economy heavily depends on agriculture and mineral resources. Rural households in the Chhattisgarh plains rely primarily on paddy cultivation, which is susceptible to climatic conditions. Erratic monsoons or crop failures often lead to localized food inflation, pushing up prices of staples in rural markets. Chhattisgarh has significant tribal and lowincome rural populations with limited income diversification. These households spend a larger proportion of their earnings on food and basic necessities, making them especially vulnerable to inflation. A small rise in prices can lead to a sharp decline in their ability to afford adequate nutrition and essential services. (Government of Chhattisgarh, 2023) [3] .

Methodology

For the study, 228 households were selected purposively from Bemetara, Bilaspur, Dhamtari, Durg, Korba, Mungeli, Raigarh, Raipur and Rajnandgaon districts. The primary and secondary data was collected from the individual households of the selected study area. Both quantitative and qualitative data was collected to fulfill the objectives of the study. Garrett ranking model is used as analytical tool for the analysis of data and ranking of factors.

Results and Discussion:

The major factors contributing to inflation in the study area, as identified by respondents. At the top of the list is the increase in food & Non-food items costs, cited by 71.9% of respondents. The second most significant factor is agricultural dependency and seasonal farm income, acknowledged by 69.7%. In rural areas where livelihoods are mostly tied to farming, income fluctuates seasonally, creating periods of high demand and limited supply, which leads to price hikes.

Supply chain inefficiencies come next, reported by 67.5% of participants. Poor infrastructure, delays in transport, and a lack of cold storage facilities contribute to spoilage and wastage especially for perishable items which pushes prices higher. Government policies and schemes such as MGNREGA, PM-KISAN, and MSP also emerged as a notable contributor (64%). While these schemes are designed to support incomes, they may also increase liquidity in rural areas, causing demand to rise faster than supply.

Other structural issues such as long distances from markets, poor road conditions, and inadequate storage facilities were identified by 61.4% of respondents. These challenges make distribution less efficient and increase overall costs. Market imperfections especially the influence of middlemen and monopolistic practices were flagged by 60.5%, suggesting that lack of transparency and fair pricing also plays a role in inflation. The impact of epidemics, such as COVID-19, was mentioned by 58.8%. These events disrupt supply chains, reduce mobility, and strain both health and economic systems, adding inflationary pressure. Additionally, rising debt burdens due to increased cost of credit were cited by 57.5%, indicating that households and producers are spending more on loan repayments, which affects their spending and production capacity. A lack of market competition (55.3%) and the influence of global commodity prices (53.5%) were also seen as contributing to local inflation, reflecting the interconnectedness of local and international markets. Economization of resources as coping strategies of the respondents: The table highlights how rural households are adjusting their spending habits to cope with rising inflation by finding ways to save money and manage resources more carefully. One of the most common strategies is simply buying less overall, as reported by about 87% of households. This shows that families are cutting back wherever possible, prioritizing only the most essential items in their daily lives. Another popular strategy, used by 86%, is to buy things only when needed instead of stocking up in advance. This helps them manage limited cash and avoid spending more than necessary at one time. Alongside this, about 86% also mentioned that they are trying to reduce wastage, especially of food and household goods. This shows a growing awareness of the value of every rupee and the effort to make sure nothing goes to waste.

Moreover, 85% of families said they have stopped buying unnecessary items, clearly showing a shift towards more thoughtful and need-based spending. These choices reflect how people are trying to stretch their income by avoiding non-essential purchases. On the other hand, only a small number of families around 19% said they postpone purchases as a coping strategy. This could be because delaying necessary items is not always practical in rural settings. Even fewer, just 9%, said they buy in bulk and store items, likely due to the lack of enough money to make bulk purchases or challenges in storing goods safely. In simple terms, the data paints a picture of households becoming more mindful and disciplined in their spending. They are focusing on essentials, avoiding waste, and adapting their buying habits to manage the stress of inflation. This shows not just the pressure they face, but also their resilience and smart thinking in tough economic times.

Mitigating measures of the respondents

The coping mechanisms adopted by households in response to inflationary pressures, revealing a mix of incomeaugmenting and strategic adaptation efforts. The most frequently reported measure was engaging in part-time employment, with 39.47% of respondents indicating this strategy. This response highlights the growing trend of economic diversification at the household level, especially among families whose primary income is no longer sufficient to meet rising living costs. Closely following this, 31.58% of individuals reported taking up overtime work, suggesting that many are attempting to maximize earnings within their existing employment, possibly due to constraints in accessing new job opportunities or the informal nature of the local labour market. On the other hand, only 11.40% of respondents reported efforts to improve agricultural practices a surprisingly low figure considering the rural setting of the study area. This indicates potential challenges such as lack of extension services, limited capital for agricultural investment, or low confidence in returns from farming due to market volatility and climate risks. Meanwhile, a modest 9.21% of individuals focused on skill development to either improve their employability or transition into new income-generating activities. This suggests a growing awareness among a section of the population about the need for long-term human capital enhancement, although uptake appears limited possibly due to barriers like cost, time, and access to training institutions. Interestingly, only 8.33% of respondents reported developing or adapting an investment habit. This low percentage reflects both the lack of disposable income and limited financial literacy, especially in inflationary periods when immediate consumption often takes precedence over

Awareness about Inflation

The data presented a comprehensive insight into respondents' awareness and perceptions regarding inflation and its impacts. Overall, the findings reflect a high level of awareness about inflation as a phenomenon, although nuances in understanding its causes and implications vary. To begin with, a strong majority (82.94%) either strongly agreed (24.17%) or agreed (58.77%) that inflation affects their standard of living, indicating a clear recognition that rising prices erode household purchasing power and affect overall wellbeing. Similarly, when asked if inflation reduces buying power, the response was unanimous all 228 respondents (100%) agreed, with 60.09% strongly agreeing. This demonstrates that the impact of inflation on everyday consumption is both felt and understood by rural households. However, when it comes to more nuanced aspects of inflation, such as awareness of general price change, the results are mixed. While only 12.72% strongly agreed and 30.26% agreed, a significant 57.02% expressed no opinion, indicating limited awareness or confidence in understanding how inflation unfolds over time beyond immediate price increases. This suggests a potential knowledge gap in macroeconomic literacy, despite firsthand experiences of inflation's effects. Interestingly, 46.05% of respondents disagreed with the notion that inflation could promote real earning capacity, and 30.70% had no opinion. Only a small minority (23.25%) agreed with this statement, reflecting either skepticism or unfamiliarity with the idea that moderate inflation could sometimes be linked with wage growth or economic expansion under certain conditions. When asked about the cause of price increases in food articles due to commodity trading, a majority (58.33%) disagreed, and 25.88% had no opinion. This reflects limited understanding of how market speculation and financial instruments influence prices at the consumer level. A similar pattern emerges in the statement regarding market forces influencing general price levels, where 81.58% (22.81% strongly agreed and 58.77% agreed) recognized the role of demand-supply dynamics, showing relatively better awareness about basic economic mechanisms. On the role of Public Distribution System (PDS) as a buffer against inflation, every single respondent (100%) strongly agreed that it provides crucial support. This underscores the vital role of food subsidies and ration distribution in protecting vulnerable populations from price shocks. Similarly, when evaluating government measures to control inflation, all respondents (100%) agreed that the efforts are satisfactory. While this unanimous agreement may reflect trust in public institutions or benefits received under schemes like PM-Garib Kalyan Yojana or price regulation policies, it may also point to limited public scrutiny or awareness of inflation-control mechanisms.

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