In sync with its wholesale price counterpart, the retail-price inflation declined to 9.86 per cent in July from 9.93 per cent in June, on the back of easing of fuel and light inflation.
However, food inflation ticked up further.
Inflation in urban areas remained in double digits, but eased a little to 10.10 per cent in July from 10.44 per cent in June. In rural areas, however, inflation inched up in July to 9.76 per cent from 9.65 per cent in the previous month.
Overall inflation for June was revised down to 9.33 per cent from 10.10 per cent, estimated provisionally.
The wholesale-price inflation stood at 6.87per cent in July, down from 7.25 per cent in June.
Food and beverage retail inflation, which has a 49 per cent weight in consumer price index, moved up to 11.53 per cent from 10. 71 per cent, due to sharp spike in the rate of change of price rise in pulses, fruit and cereals.
Pulses saw inflation going up by three percentage points from 9.33 per cent to 12.49 per cent in July. Inflation in fruit rose to 9.08 per cent from 6.92 per cent last month.
In the urban areas, food inflation moved up to 12.15 per cent from 11.52 per cent and in rural areas it rose to 11.33 per cent from 10.41 per cent. Vegetable inflation remained elevated at over 27.33 per cent, slightly down from 27.6 per cent last month as the rate of change of price rise in vegetables in urban areas eased to 27.14 per cent from 30.93 per cent in June.
It was fuel and light which brought down the overall inflation number, as the rate of price rise in this category declined from double digits of 10.46 per cent to 7.36 per cent. This is due to reduction in market-determined fuel prices.
Nomura Financial Advisory and Securities (India) opined the moderation in July CPI inflation, like the fall in July WPI inflation, might not be sustainable. This is because food prices might rise because of poor rainfall and fuel inflation remaining suppressed due to an incomplete pass-through of fuel prices to end users, besides other factors.
Price data from 1,181 villages and 310 towns are collected and sent to the web portal of Mospi, which has provisions for scrutiny tables to check any large variations in data. While India Post collects data for rural areas, National Sample Survey Organisation collects figures for urban areas.