India’s retail inflation jumped to a 14-month high of 6.21% in October, according to data released by the Ministry of Statistics and Programme Implementation on Tuesday.
The price rise indicator stood at 5.49% in September, 3.65% in August and 3.54% in July.
The Reserve Bank of India is tasked with keeping inflation at 4%, with a tolerance band between 2% and 6%. In October, the inflation rate crossed the tolerance cap of 6% for the first time since August 2023.
The surge was primarily driven by high food prices. The Consumer Food Price Index shot up to a 15-month high of 10.87%.
The index was at 9.24% in September and 6.61% in October last year.
The price rise in food items was higher in urban areas (11.09%) than in rural areas (10.69%).
Food and beverages registered an inflation of 9.69% in October, as compared to 8.36% in September. For perishables like vegetables, the rate was 42.18%, against 35.99% in September.
Oils and fats also saw a sharp increase in the inflation rate, from 2.47% in September to 9.51% in October.
“High food inflation led by strong momentum in prices of vegetable and edible oil remains a cause of concern,” Rajani Sinha, chief economist at CareEdge Ratings, was quoted as saying by The Indian Express. “The surge in vegetable prices, particularly tomatoes and onions, can be attributed to unseasonal rains and extended monsoons in certain parts of the country.”
Crisil chief economist Dharmakirti Joshi stated that the jump in edible oil inflation was driven by a steep 27% rise in global prices due to supply disruptions, reported The Hindu.
Sinha pointed out that as food inflation directly impacts household inflation expectations, it is crucial to manage it.
“This situation also underscores the need for the government to implement additional supply-side measures to stabilise food prices,” said Sinha.