Retail inflation rose to 7.34 per cent in September, mainly on account of higher food prices, according to government data. The inflation based on the Consumer Price Index (CPI) stood at 6.69 per cent in August. It was 3.99 per cent in September last year.
This is the highest since January when the retail inflation reached a near six-year high of 7.59%.
The rate of price rise in the food basket was 10.68 per cent in September compared to 9.05 per cent in August, as per the data released by the National Statistical Office (NSO) on Monday.
Prices of vegetables saw a sharp increase of 20.73% in September, as compared to the same month last year. Meat and fish saw an inflation o 17.60%, while pulses and products saw an inflation of 14.67% over last year.
Prices of pan, tobacco and intoxicants also increased by 10.81%.
“The Price data are collected from representative and selected 1114 urban markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of September 2020, NSO collected prices from 98.0% villages and 97.8% urban markets while the prices reported therein were 83.0% for rural and 87.9% for urban,” the government said in a media statement.
In the month of August, retail inflation had marginally softened to 6.69% as compared to 6.93% in July.
The Reserve Bank of India mainly factors in retail inflation while deciding on the key interest rate.
“The MPC also decided to continue with the accommodative stance as long as necessary – at least during the current financial year and into the next financial year – to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth,” RBI had said during the its Monetary Policy Committee meet last week.
Meanwhile, Industrial production declined by 8 per cent in August, mainly due to lower output of manufacturing, mining and power generation sectors, official data showed on Monday.
According to the Index of Industrial Production (IIP) data, manufacturing sector production registered a decline of 8.6 per cent, while the output of mining and power segments fell 9.8 per cent and 1.8 per cent, respectively.
The IIP had contracted by 1.4 per cent in August 2019.
"It may not be appropriate to compare the IIP in the post pandemic months with the IIP for months preceding the COVID 19 pandemic," the Ministry of Statistics and Programme Implementation said in a statement.
"With the gradual relaxation of restrictions, there has been a relative improvement in the economic activities by varying degrees as well as in data reporting," it added.
With PTI inputs