Snapping its declining trend, retail inflation rose to a three-month high of 5.55 per cent in November on firming food prices, including vegetables and cereals, though it remains within the RBI’s comfort zone of less than 6 per cent.
Photograph: Rupak De Chowdhuri/Reuters
Inflation based on the Consumer Price Index (CPI) was 4.87 per cent in October and 5.88 per cent in November 2022, the government data released on Tuesday showed.
The previous high was 6.83 per cent in August and inflation had been on a decline since then.
According to the National Statistical Office (NSO) data, inflation in the food basket increased to 8.7 per cent in November from 6.61 per cent in October and 4.67 per cent in the year-ago month.
Food basket has about 50 per cent weightage in CPI.
The annual rate of price rise in ‘spices’ was 21.55 per cent, ‘pulses and products’ 20.23 per cent, vegetables 17.7 per cent, and fruits 10.95 per cent.
The year-on-year inflation in ‘cereals and products’ was 10.27 per cent.
However, there was a decline in retail prices of ‘oil and facts’ was about 15 per cent.
Data further showed that inflation in rural areas was at 5.85 per cent while it was 5.26 per cent in urban centres taking the national average to 5.55 per cent during November.
The Reserve Bank of India has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
In the monetary policy announced last week, the RBI projected the CPI inflation at 5.4 per cent for 2023-24, with a reading of 5.6 per cent in the third quarter and 5.2 per cent in the last quarter.
Among the states, inflation was the highest in Odisha at 7.65 per cent. Other states which witnessed inflation of more than 6 per cent were Bihar, Gujarat, Haryana, Karnataka, Punjab, Telengana, and Rajasthan.
Delhi witnessed the lowest inflation at 3.1 per cent.
Aditi Nayar, chief economist at ICRA said that the surge in food and beverages inflation to 8 per cent in November was largely led by a sharp increase in vegetables inflation, even as seven of the 12 food sub-groups reported a moderation in their year-on-year inflation print.
She further noted the core CPI inflation eased to 4.2 per cent in November 2023 from 4.4 per cent in October 2023.
“This was the lowest print in the post-pandemic period.
“The sustained easing in the core CPI inflation is positive and has counterbalanced the menacing food inflation prints over the last few months,” Nayar said.
NSO collects the price data from selected 1,114 urban markets and 1,181 villages covering across the country on a weekly roster.
During November 2023, NSO collected prices from 99.9 per cent villages and 98.6 per cent urban markets.
