Sept inflation quickens to 7.81%

Inflation mainly driven by higher fuel prices

Inflation rose 7.81% in September from a year earlier as prices of potato, pulses, wheat and sugar soared. The impact of increase in diesel prices is partly reflected in last month’s figures. High speed diesel inflation soared 8.94% after the government increased diesel prices by Rs 5 on September 13.

The data comes ahead of Reserve Bank of India’s monetary policy on October 30. The central bank is under pressure to lower interest rates as its anti-inflationary stance has hurt growth. But a further rise in inflation would make RBI’s job difficult.

Inflation had increased 7.55% year-on-year in September 2012 and 10% in October 2011. The Wholesale Price Index for September 2012 rose by 1.1% to 168.4 from 166.6 for the previous month.

Food articles inflation increased 7.86%, while non-food article inflation was up 10%. Fuel & power index soared 11.88%, while manufactured products inflation was up 6.26%.