High eatable prices keep inflation near double digit in Sept

Retail inflation at 9.73%, marginally down from 10.03% of August

Higher prices of sugar, edible oils, vegetables and pulses kept retail inflation near double digit at 9.73% in September, marginally down from the previous month.

In August, it was 10.03%, according to the Consumer Price Index (CPI) data released today.

The highest rise in prices last month was in sugar, up 19.4%, year-on-year basis.

In urban areas, retail inflation moderated to 9.72% in September, compared to 10.19% in August. The retail price rise in rural areas worked out to 9.79% during September down from 9.9% in the previous month.

CPI for September, however, did not fully capture the impact of hike in diesel price, announced by the government on September 13, to help the Oil Marketing Companies (OMCs) to reduce their under recoveries.

 

CPI for edible oils during September increased by 18.54%, pulses by 16.2%. Vegetable prices also grew by 14.3%, while meat and fish and egg rates rose by 12.06%.

The Reserve Bank in its mid-quarter monetary policy last month had raised concerns about the price situation saying "as inflationary tendencies have persisted, the primary focus on monetary policy remains the containment of inflation and anchoring of inflation expectations".

The central bank had refrained from reducing the key pending rates despite persistent pressure from industry to cut them to promote sagging economic growth.

Meanwhile, industrial growth has slowed to 2.7% in August, compared to 3.4% in the same month last year, which indicates persistent sluggishness in the economy. This may prompt RBI to cut key interest rates in its second quarter review on October 30.