The stickiness in food prices
has relevance for policy in India as food accounts for about 46 per cent in overall consumer price index (CPI), the highest among inflation-targeting countries.
Therefore, the risk of policy errors from excluding sticky components in the food sector is larger in India as against advanced economies, where food has a low share in CPI (<10 per cent), the RBI study said.
The compiled dataset comprises 1.3 million price data points covering 45 food items on a weekly basis across 85 centres in the country for the period 2005-18.
This was one of the first attempts at compiling actual price data for estimating price stickiness in India. These products represent more than two-thirds of the items in the official CPI of food category representing each of the 10 product sub-groups, it added.