The impact of food inflation shock on core inflation was the maximum during the late 1990s, which has declined over time, the paper finds. The response of core inflation to a one per cent rise in food inflation has declined from 0.37 percentage points in the second quarter of 1998-99 to 0.14 percentage points in the third quarter of 2023-24. The responsiveness of core inflation to food shock has declined substantially in the post de jure flexible inflation targeting regime in India.
