Amid concerns that the Reserve Bank of India (RBI) could tighten its monetary policy in January 2010, inflation during October more than doubled to 1.34 per cent, as compared to 0.5 per cent a month earlier, mostly due to the rising cost of essential food items.
In the first monthly data released by the government on Saturday, the build-up inflation in the financial year so far was 6.13 per cent compared to 5.99 per cent in the corresponding period the previous year.
At variance with the earlier practice of weekly release, this time the government has come out with a comprehensive inflation data on a monthly basis with 1993-94 as the base year.
Financial experts were of the view that RBI might tighten its monetary stance in the January policy review if the inflationary pressure continued to build up. "If the inflationary pressure develops, then authorities [RBI] may take action even earlier. The RBI will have to wait and see how the price situation evolves during November-December," Prime Minister's Economic Advisory Council Chairman C. Rangarajan said.
On an annual basis, the price of potato has doubled since October last year, while onions were expensive by 37 per cent. Vegetables were costlier by 23 per cent, sugar price rose by 45 per cent and wheat price by 13.22 per cent. Food articles such as wheat became dearer by 2 per cent and rice 3 per cent in October.