Retail inflation in October touches 14-month high of 6.21%
What's the story
India's retail inflation, measured by the Consumer Price Index (CPI), hit a 14-month high of 6.21% in October. The figure marks a sharp rise from August's 5.49%, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed. The data also showed that rural areas are witnessing higher inflation at 6.68%, as opposed to urban areas at 5.62%.
Inflation management
RBI's inflation target and current scenario
The Reserve Bank of India (RBI) aims to keep inflation within the 2-6% range, with an ideal medium-term target of 4%. However, the current rate exceeds the upper limit. The central bank employs several monetary policy tools like interest rates, open market operations, etc., to control inflation levels in the country.
Rising costs
Food inflation records significant annual increase
The Consumer Food Price Index (CFPI) witnessed a sharp year-on-year inflation rate of 10.87% in October, mainly due to increasing prices of fruits, vegetables, oils and fats. This marks a major jump from September's food inflation rate of 9.24%. The data also shows that rural areas saw a CFPI inflation rate of 10.69%, while urban areas witnessed a marginally higher rate of 11.09%.
Price surge
Housing and electricity costs continue to rise
Inflation in housing also increased, with October recording a rate of 2.81%, slightly up from September's 2.72%. The housing index is calculated only for urban areas. Meanwhile, electricity costs continued their upward trend, with the electricity index rising to 162.5 and a YoY inflation rate of 5.45% in October, compared to 5.39% in September.