NEW DELHI: Retail inflation, as measured by the Consumer Price Index, slowed to a three-month low of 5.02% in September from a year ago, led by a decline in vegetable prices, according to data from the ministry of statistics and programme implementation released on Thursday.
Consumer prices came down below the Reserve Bank of India’s so-called tolerable limit of 6% for the first time in three months as supplies eased on the back of fresh summer-sown harvests hitting markets. In August, the retail inflation rate stood at 6.83%.
Food and beverage inflation rose 6.3% in September, the slowest pace in a quarter, compared to a rise of 9.19% in August, the data showed. Cereal prices however have continued to stay in the double digits for 12 months now, despite a raft of measures by the Union government to cool prices.
Grain prices rose 10.95% in September, compared to an increase of 11.9% in August. Egg prices rose at a faster clip at 6.42% against 4.3% in the previous month. Inflation in pulses, a key group of commodities that have pinched household budgets, aside from cereals, climbed at a faster pace in September at 16.4%, against a rise of 13% in August.
Since June this year, the Union government has been pushing millions of tonnes of additional cereals from state-held stocks in open markets to control grain prices, mainly wheat, amid stubbornly high food inflation.
Overall, the lower pace of growth in inflation in September, as predicted by the RBI, will help to accelerate GDP growth, analysts said. However, since food commodities have been the main driver of prices, much will depend on output of key summer-sown commodities, such as rice and pulses, whose harvesting has just begun.
Retail inflation jumped to a 15-month high of 7.44% in August, breaching the Reserve Bank of India’s tolerable limit of 4% on the back of runaway grocery and food prices.