India's headline retail inflation for October dropped to hit a 5-month low 4.87 per cent as against 5.02 per cent in September, according to the latest data released by the National Statistical Office (NSO) on Monday. The headline inflation has come back to the Reserve Bank of India (RBI)'s comfort zone of below 6 per cent, thanks to the combination of a favourable base effect and cooling prices of some food items. It was at 7.56 per cent in September 2022.
In June this year, the previous low inflation was recorded at 4.87 per cent.
Food inflation, which accounts for nearly half of the overall consumer price basket, jumped 6.61 per cent in October as compared with 6.56 per cent in September.
The RBI's Monetary Policy Committee (MPC), in its October meeting, projected CPI inflation at 5.4 per cent for 2023-24, a moderation from 6.7 per cent in 2022-23. Earlier, the government has tasked the central bank to ensure the CPI inflation remains at 4 per cent with a margin of 2 per cent on either side. The RBI mainly factors in the retail inflation while arriving at its bi-monthly monetary policy.
There was some slight relief in the inflation rates for cereals (from 11 per cent in September to 10.65 per cent in October), meat and fish (from 4.1 per cent to 3.3 per cent), milk (from 6.9 per cent to 6.44 per cent) and spices, which remained elevated at 22.8 per cent in October. These were offset by gains on other fronts.
The pace of price rise in key protein sources such as pulses and eggs rose sharply to 18.8 per cent and 9.3 per cent, respectively, inflation in fruits and sugar also picked up pace to hit 9.34 per cent and 5.5 per cent.
According to the NSO release, the price data are collected from selected 1,114 urban Markets and 1,181 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 2023, the NSO collected prices from 99.8 per cent villages and 98.6 per cent urban markets while the market-wise prices reported therein were 89.0 per cent for rural and 92.0 per cent for urban.