Retail inflation falls a tad to 9.64% in July

Consumer price index-based inflation declined to 9.64 per cent in July from 9.87 per cent in the previous month. However, the decline was not uniform across the country as urban areas witnessed a rise in inflation, while rural areas saw a fall, official data showed on Monday.

The inflation rate rose to 10.26 per cent in July from 10.16 per cent in June in urban areas, while it declined to 9.14 per cent in villages from 9.63 per cent. The contrast would be because of rent, which is not calculated for villages. However, the rent figures were not given in the break-up in the official data.

At the national level, while the rate of price rise in vegetables was up, those in cereal, pulses, fruit and sugar softened. The food inflation in July softened to 11.24 per cent from 11.84 per cent in the previous month.

However, the retail-price inflation in vegetables rose to 16.4 per cent in July, from 14.55 per cent in the previous month, the data showed.

"Vegetable prices are going up because of heavy rain," said C Rangarajan, chairman of the Prime Minister's Economic Advisory Council.

 

Inflation in cereals and pulses came down to 16.03 per cent (from 17.59 per cent) and 5.55 per cent (from 8.82 per cent), respectively in July. The rate of price rise fell to 6.81 per cent during the month from 7.49 per cent a month ago.

 

Inflation in milk and milk products rose to 8.14 per cent from 7.96 per cent. Eggs, fish and meat and vegetables prices went up to 13.82 per cent in July versus 12.69 per cent.

Rangarajan said the scope for the Reserve Bank of India (RBI) taking monetary action was limited to the primary condition of "what is happening to the rupee in the foreign exchange market". RBI keeps a close watch on the inflation data to decide its monetary policy. However, in its first quarter monetary policy, in the previous month, RBI had kept its key policy rates unchanged to stabilise the rupee and contain the escalating current account deficit.