Retail inflation accelerated to a five-month high of 7.41% in September, from 7% in August, as food inflation surged sharply to 8.41% last month — the steepest level in 22 months. September’s retail inflation was the highest since April, when price rise quickened to an almost eight-year high of 7.79%.
Eonomists have warned that the latest negative surprise could force the Reserve Bank of India (RBI) to opt for further interest rate increases beyond the widely expected 0.5 percentage point increase in the December monetary policy.
This is the ninth month in a row that inflation has exceeded the 6% upper tolerance threshold mandated for the RBI and would require it to send an explanation to the government on its inability to achieve the price stability target. In August, RBI revised Bank Rates upwards by 50 basis points from 5.15% to 5.65%, in a bid to control inflation.
Rural inflation picked up further steam, from 7.15% in August, to touch 7.56% in September, while urban consumers also experienced a resurgence in price rise at 7.27%, from 6.72% a month earlier, data released by the National Statistical Office (NSO) on Wednesday show. Inflation in cereals quickened to 11.5%, with rural India facing almost 12% price gains, up sharply from 9.6% in August and almost doubling from July’s 6.9% pace. Similarly, vegetables’ inflation almost virtually doubled over two months, from 10.9% in July to 18.1% in September, with urban consumers facing a sharper 20.1% rise.
The Consumer Food Price Index rose 8.6%, up from 7.6% in August, with urban consumers facing a higher surge at 8.65% from 7.55% a month earlier. For rural India, the uptick was only slightly less pronounced with food prices rising 8.53%, compared with 7.6% in August. Six major States reported inflation that exceeded 8% — West Bengal (9.44%), Telangana (8.67%), Madhya Pradesh (8.65%), Andhra Pradesh and Odisha (8.05%) and Maharashtra (8.03%) — with Gujarat and Haryana coming close at 7.95%.
The rise in inflation has been accompanied by high petrol and diesel prices across India. On October 13, petrol prices stand at Rs. 96.72 (New Delhi), Rs. 106.31 (Mumbai) while diesel prices stand at Rs. 89.62 (New Delhi) and Rs. 94.27 (Mumbai).
Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. Click here
The Hindu’s Editorials
Text & Context
The Hindu’s Daily Quiz
According to the IMF forecast, India is projected to grow at what percent in the current fiscal year?
- 6.0%
- 6.8%
- 5.8%
- 8.7%
To know the answer and to take the quiz, click here
