Retail inflation rises marginally to 4.48% in October

Ground Report | New Delhi: Retail inflation rises; Retail inflation rose to 4.48 percent in October on the back of a pick-up in food prices, government data showed on Friday. The consumer price index (CPI) based on inflation stood at 4.35 percent in September. Consumer Price Index (CPI) based inflation stood at 4.35 percent in September and 7.61 percent in October 2020.

According to data released by the National Statistical Office (NSO), inflation in the food basket rose to 0.85 percent in October from 0.68 percent in the previous month. The Reserve Bank, which primarily factors in CPI-based inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep it at 4 percent, with a tolerance band of 2 percent on either side.

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RBI estimates CPI inflation for 2021-22 at 5.3 percent: 5.1 percent in Q2, 4.5 percent in Q3; 5.8 percent in the last quarter of the fiscal year, the risk broadly balanced. CPI data is mainly factored in by RBI while formulating its bi-monthly monetary policy. Last month, the central bank's Monetary Policy Committee (MPC) kept the repo rate unchanged at 4 percent for the eighth time in a row, lowered the inflation target for 2021-22 to 5.3 percent, and signaled an end to it. Liberal policy as the economy shows signs of recovering from the impact of the COVID-19 pandemic. (Retail inflation rises)

The data showed that inflation in the consumer food price index (CFPI), or basket of foods, rose to 0.85 percent during October, from 0.68 percent in September. Marine growth in the food basket was mainly driven by a sharp rise in oil and fat prices, which rose 33.50 percent year-on-year in October. Besides, the prices of meat and fish saw an increase of 7.12 percent, while pulses and products increased by 5.42 percent and milk and products by 3.19 percent. Non-alcoholic beverages climbed 11.40 percent. On the other hand, the vegetable segment declined by (-)19.43 percent and eggs by (-)1.38 percent.

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Besides food and beverages, the fuel and lighting segment grew by 14.35 per cent in October, while clothing and footwear grew by 7.53 percent and the housing segment by 3.54 percent. The growth in IIP during September was led by the mining sector followed by the manufacturing and power sectors. The mining sector grew by 8.6 percent year-on-year to 95.1 in September, while the manufacturing sector grew by 2.7 percent to 129.9. MoSPI data shows that the power sector also grew by 0.9 percent to 167.9.

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