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Retail inflation breaches RBI’s tolerance level, soars to 14-month high of 6.21% in October
Nov-13-2024

Breaching the Reserve Bank of India’s (RBI) upper tolerance level, India’s retail inflation based on Consumer Price Index (CPI) rose to a 14-month high of 6.21 percent in October 2024, as food inflation galloped on the back of rising vegetable prices. Inflation was 5.49 per cent in September and 4.87 percent in the year-ago month. Retail inflation trended below the RBI’s upper tolerance band of 6 percent since September last year. It was at 6.83 percent in August 2023. The RBI, which mainly factors in the CPI while arriving at its bi-monthly monetary policy, has been tasked by the government to ensure retail inflation remains at 4 percent with a margin of 2 percent on either side.

The NSO, Ministry of Statistics and Programme Implementation (MoSPI) in its data has showed that Rural CPI (General) in October 2024 stood at 6.68 percent over 5.87 percent in September 2024. The Urban CPI (General) stood at 5.62 per cent in October as against 5.05 per cent in September. The index value for Rural, Urban and Combined CPI (General) stood at 199.5, 193.7 and 196.8 respectively, in October 2024. The price data are collected from 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 October 2024, NSO collected prices from 100.0 percent villages and 98.5 percent urban markets while the market-wise prices reported therein were 88.3 percent for rural and 92.8 percent for urban.

The Consumer Food Price Index (CFPI) recorded a significant year-on-year (Y-o-Y) inflation rate of 10.87 percent, driven largely by rising prices of vegetables, fruits, oils and fats. In September, food inflation stood at 9.24 percent and 6.61 percent in October 2023. Housing inflation also rose, with October 2024 recording a rate of 2.81 percent, slightly up from September’s 2.72 percent. The housing index is calculated only for urban areas. Electricity costs continued their upward trend, with the electricity index rising to 162.5 and a Y-o-Y inflation rate of 5.45 percent in October, compared to 5.39 percent in September. During the month of October, 2024 significant decline in inflation is observed in Pulses & products, Eggs, Sugar & confectionery and spices subgroup. 


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