New Delhi, Dec 14: Retail inflation inched up to a three-month high of 4.91 per cent in November, mainly due to an uptick in food prices, government data showed on Monday.
The Consumer Price Index (CPI) based inflation, however, remained within the comfort zone of the Reserve Bank of India. The government has mandated the central bank to keep the inflation at 4 per cent (+/- 2 per cent).
The annual CPI inflation was 4.48 per cent in October 2021 and 6.93 per cent in November 2020. It had eased from 5.3 per cent in August to 4.35 per cent in September and then moved up to 4.48 per cent in October.
As per the data released by the National Statistical Office (NSO), inflation in vegetables segment was negative on a yearly basis. However, it was on the higher side as compared to the preceding month.
The rate of price rise in the ‘oils and fat’ segment was 29.67 per cent year-on-year. The inflation was, however, lower in November over October.
On the other hand, inflation in the fruit basket was higher in November over the preceding month.
Overall, inflation in the food basket was 1.87 per cent in November compared to 0.85 per cent a month earlier. However, it was significantly down from 9.5 per cent in November 2020.
With the Centre and state governments reducing taxes on petrol and diesel, inflation in the ‘fuel and light’ segment was low on a sequential basis.
Aditi Nayar, Chief Economist, ICRA, said the recent correction in prices of many food items other than tomatoes, has provided relief for the inflation trajectory, especially given the unfavourable base effects that lie ahead.
“In our assessment, as long as the CPI inflation remains within the target of 2-6 per cent, the Monetary Policy Committee and RBI will prefer to prioritise growth, and maintain policy support to impart durability and sustainability to the recovery,” she said.
Morup Namgail, Head-Agritech, IFFCO Kisan Sanchar Ltd said the comforting feature for the common man is the declining prices of vegetables on an annual basis, which to a large extent can be attributed to seasonal factors and decline in transport cost on account of reduction in prices of petrol and diesel.
The Reserve Bank, which mainly factors in the retail inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep the inflation at 4 per cent with margin of 2 per cent on either side.
The RBI had last week said over the rest of the year, inflation prints are likely to be somewhat higher as base effects turn adverse. However, it is expected that headline inflation will peak in the fourth quarter of the current fiscal and soften thereafter.
The RBI has projected the CPI inflation at 5.3 per cent for 2021-22.
The NSO collects the price data from selected 1,114 urban markets and 1,181 villages covering all states and union territories through personal visits.
During November 2021, NSO collected prices from 99.7 per cent villages and 98.4 per cent urban markets.
As per the data, inflation in the rural areas was 4.29 per cent and in urban India it was 5.54 per cent.
