An image of Finance Minister Nirmala Sitharaman has gone viral across social media along with a claim. The texts on the viral image attribute the Finance Minister as saying, "Inflation will affect the rich more than the poor in 2022".
In response to the viral image, the fact-check wing of the Press Information Bureau denied the claim. The Fact Check wing of the Press Information Bureau has come under the scanner in the past too due to its tendency to paint the government in a positive light and for criticising media outlets.
The viral image has been shared by the Fact Check wing of the Press Information Bureau as an edited infographic. The image with the caption "Inflation is affecting the rich more than the poor in 2022." has been branded as fake by the PIB.
The fact check wing has termed the viral image as fake stating that the Finance Ministry has not made such a statement.
We conducted a keyword search with the phrase, which was refuted by PIB. We came across this article by Moneycontrol published on May 15, 2022. The article carries the caption, "Inflation hurt rich more than poor in FY22, says Finance Ministry".
However, upon opening the article we found that the headline has been changed to the following "Lower inflation has reinforced favourable redistribution of income from top to bottom and middle-income groups: Finance ministry."
The article asserts that as per the Finance Ministry, the poor were hurt less than the rich due to rise in inflation. The Indian consumer has been divided into three broad classes as per the report: the top 20 per cent, the middle 60 per cent, and the bottom 20 per cent.
The report also states that the ministry's findings were seemingly in conflict with comments made previously by Reserve Bank of India Governor Shaktikanta Das.
In the statement by Das, he had announced a surprise 40-basis-point repo rate hike on May 4. He had remarked that high inflation has "pronounced adverse effects on the poorer segments of the population by eroding their purchasing power".
Reports from the Indian Express, Deccan Herald and Live Mint also had the same reports referring to the statement made by the Finance Ministry.
We then conducted another keyword search and came across a Monthly Economic Review Report published by the Department of Economic Affairs of the Ministry of Finance in April 2022 in which a similar statement was mentioned.
In the report, the Finance Ministry had combined the expenditure classes with their respective inflation numbers for the last two years. The expenditure classes were divided into the top 20 per cent, the middle 60 per cent, and the bottom 20 per cent.
On page 13 of the report, it is noted that the bottom and middle groups had the greatest share of expenditure on food.
As per the latest data, India is experiencing high inflation at eight year high of 8.38 per cent in rural areas in April while urban inflation was at an 18-month high of 7.09 per cent. Food inflation for April has increased as well leading to the government banning wheat exports.
As per the findings in the report, inflation for the bottom 20 per cent of rural consumers has decreased to 5.2 per cent in FY22 from 6.0 per cent in FY21. For the urban consumers, inflation fell to 5.7 per cent from 6.8 per cent.
Meanwhile, inflation for the top 20 per cent of rural consumers increased to 5.6 per cent in FY22 from 5.5 per cent in FY21. For their urban counterparts, inflation fell to 5.7 per cent from 6.5 per cent.
On-Page 14, the Finance Ministry after calculating the relevant inflation numbers, the report concludes that "relatively low food inflation (<6%) in FY 21-22 have cushioned the bottom and middle groups due to the major share of their expenditure on food."
The Fact Check wing of the Press Information Bureau has tweeted an image with the caption "Inflation is affecting the rich more than the poor in 2022." This image has been branded as fake by the PIB stating that the Finance Ministry had made no such statement. The fact check wing has termed the viral image as fake stating that the Finance Ministry has not made such a statement.
However,as per the report by the Monthly Economic Review Report published by the Department of Economic Affairs of the Ministry of Finance in April 2022, it is stated, "Evidence of consumption patterns suggests that inflation in India has had less impact on lower-income groups than higher-income groups." Apart from the report, several reputed media outlets have published articles on the report by the Finance Ministry reiterating their views.
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