Soaring vegetable prices pushed the retail inflation rate to a nine-month high of 5.49 pr cent in September, according to government data released on Monday.
The consumer price index (CPI)-based retail inflation rate was 3.65 per cent in August and 5.02 per in September 2023.
The previous high inflation rate was witnessed in December 2023 at 5.69 per cent.
As per data released by the National Statistics Office (NSO), the inflation rate in the food basket rose to 9.24 per cent in September compared to 5.66 per cent in August and 6.62 per cent in the year-ago month.
“It is likely that the increase in inflation rate for the month of September 2024 is due to high base effect and weather conditions,” NSO said.
According to another data released on Monday, the wholesale price inflation (WPI) rose to 1.84 per cent in September as food items, especially vegetables, turned costlier.
The wholesale price index (WPI)-based inflation was 1.31 per cent in August.
It was (-) 0.07 per cent in September last year.
The Reserve Bank of India (RBI), which kept the key short-term lending rate unchanged earlier this month, has been asked by the government to ensure the CPI inflation rate remains at 4 per cent with a margin of 2 per cent on either side.
The annual inflation rate in the vegetable basket in September was nearly 36 per cent and in ‘pulses and products’ it was 9.81 per cent. Fruits, too, were dearer.
However, inflation in spices was in the negative in September, compared to the year-ago month.
“The surge in food and beverages inflation in September 2024 vis-à-vis August 2024 was largely led by vegetable inflation, which surged to a 14-month high of 36 per cent from 10.7 per cent in the previous month.
“Excluding this, food and beverages inflation slumped to a 59-month low of 3.9 per cent in September 2024 from 4.3 per cent in August 2024,” said Aditi Nayar, Chief Economist and head of Research and Outreach, Icra Ltd.
While unveiling the bi-monthly monetary policy on October 9, RBI Governor Shaktikanta Das had stressed that the central bank will have to closely monitor the price situation and keep the “inflation horse” under tight leash.
Das had also said the CPI print for September would see a big jump due to unfavourable base effects and pick-up in food price momentum, caused by the lingering effects of a shortfall in the production of onion, potato and chana dal (gram) in 2023-24, among other factors.
The NSO data further said while the national inflation rate is 5.49 per cent, the corresponding rates for rural and urban work out at 5.87 per cent and 5.05 per cent, respectively.
The highest inflation rate was in Bihar (7.5 per cent) while the lowest was in Delhi (3.67 per cent). The inflation food items were higher in urban areas.
The year-on-year housing inflation rate in September was 2.78 per cent.
