India's consumer price inflation shoots up to 3.99% in September
15 October 2019
Consumer price inflation in the country rose further to 3.99 per cent in September 2019, hitting the upper limit of Reserve Bank of India’s tolerance band, from 3.21 per cent in August provisional figures released by the Central Statistics Office (CSO) showed.
Against this, the broader wholesale price index has fallen to 0.33 per cent levels in September. India’s consumer inflation has been steadily rising from 3.15 per cent in July as opposed to the wholesale price inflation that has steadily declined.
The inflation rate based on the consumer price index (CPI) was 3.70 per cent in September 2018.
Data released by the CSO showed that inflation rate for the food basket rose further to 5.11 per cent in September 2019 from 2.99 per cent in August. Food price inflation was at 0.51 per cent in September 2018.
Consumer price inflation for the rural areas shot up to 3.24 per cent in September 2019 from 2.18 per cent. It was 3.27 per cent in September 2018.
Consumer price inflation for the urban areas shot up to 4.78 per cent in September 2019 from 4.49 per cent in August. It was 4.31 per cent in September 2018.
Food price inflation for rural areas rose 3.22 per cent in September 2019 from 0.85 per cent in August. It was 0.87 per cent in September 2018.
Food price inflation for urban areas climbed further to 8.76 per cent in September from 7.07 per cent in August. It was (-) 0.22 per cent in September 2018.
It may be noted that the Reserve Bank of India on Friday cut interest rates for the fifth time in a row in an attempt to give a renewed push to a slowing economy, and said it will maintain an accommodative policy stance until growth revives.
RBI lowered its repo rate, the rate at which banks borrow from it, by 25 basis points to 5.15%. With this cut, the policy rates have come off by as much as 135 basis points so far this year to a nine-year low. RBI governor Shaktikanta Das said the central bank will “continue with an accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target".
RBI has retained its consumer price inflation forecast for the second half of the fiscal year 2019-20 at 3.5-3.7 per cent.