Vindicating Reserve Bank of India Governor D. Subbarao’s stand on not easing interest rates during the monetary policy review last month on account of persistent inflationary pressures, retail inflation moved closer to double digits at 9.75 per cent in October from 9.73 per cent in the previous month. As per the CPI (consumer price index) data released here on Monday, even as the month-on-month rise in the price spiral appears to be minuscule, the fact remains that there is as yet no sign of a cooling-off to suggest a downtrend in inflation in the near-term.
On the contrary, the official data shows that the CPI-based inflation is inching up towards the psychological 10 per cent mark, driven mainly by higher prices of food items such as sugar, pulses and vegetables. On a yearly basis, the sharpest rise during the month was in the prices of sugar, up by 19.61 per cent, ostensibly due to increased demand for the sweetener in the festival season.
Among food items edible oils turned dearer by 17.92 per cent and pulses followed suit with a 14.89 per cent increase in prices on a year-on-year basis. Alongside, prices of vegetables were higher by 10.74 per cent as were meat, fish and eggs dearer by 12.18 per cent.
In non-food items, prices of clothing and footwear moved up by 10.47 per cent during the month on an annual basis. Significantly, the segmented data revealed that while retail inflation in urban areas eased markedly to 9.46 per cent in October from 9.72 per cent in the previous month, the CPI inflation for rural areas inched up to 9.98 per cent during the month from 9.79 per cent in September 2012. Thus, it is the inflationary pressures in the rural areas that has led to an uptrend in the average or combined retail inflation in October, an issue that the RBI chief had specifically flagged as being the fall-out of increase in rural wages and consequent higher all round demand for commodities.
Releasing the inflation data, the previous month, Minister of State for Statistics and Programme Implementation (Independent charge) Srikant Kumar Jena, in a statement, said: “All India provisional General (all groups) CPI numbers of October 2012 for rural, urban and combined are 126.7, 122.6 and 124.9 respectively”.
“Provisional annual inflation rate based on all India general CPI (Combined) for October 2012 on point-to-point basis (October 2012 over October 2011) is 9.75 per cent,” he said.
