In November, retail inflation eased to 6.93 per cent on account of food items such as cereals, fruits and milk. However, it is still above the satisfactory level of the Reserve Bank of India (RBI). Retail inflation, based on the Consumer Price Index (CPI), was 6.61 per cent a month ago in September and 2.77 per cent in September.
According to the National Statistics Office Fees (NSO), food inflation eased to 9.43 per cent in November from 11 per cent in the previous month. Inflation in the cereal and its products category fell to 2.32 per cent in November from 3.39 per cent in the previous month.
Inflation in the meat and fish segment stood at 1.18..67 per cent as against 1.7..7 per cent in the previous month. Inflation in vegetables eased to 15.63 per cent in November from 22.51 per cent in the previous month. Inflation in fruits and milk and its products has also come down compared to October.
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Inflation in the fuel and light group also rose to 1.9 per cent in November from 2.28 per cent in the previous month. The RBI mainly monitors the rate of retail inflation when deciding on the policy rate. The government has set a target of keeping inflation at four per cent with an increase of two per cent.
The Reserve Bank has not changed its policy rate in this month’s monetary policy review in view of rising inflation. On inflation figures, India Ratings and Research Principal Economist Sunil Kumar Sinha said retail inflation is still above the Reserve Bank’s satisfactory level.
However, headline inflation (excluding food and fuel) has been almost stable since May 2020, between 5 per cent and 5.79 per cent, he said. India Ratings & Research has forecast retail food inflation in the fourth quarter. will come in the range of to percent percent, as food prices are lower.
Peel Works, which is involved in the B2B (among traders) grocery business, said retail inflation was lower in November. The main reason for this is cheap food items. “We expect inflationary pressures to ease in the fourth quarter of the current financial year,” he said. This will leave room for the RBI to maintain a soft stance, which is necessary to keep demand on track.
According to NSO data, retail inflation in November was 2.2 per cent in rural areas and 73.7373 per cent in urban areas. As a result, CPI-based inflation stood at 6.93 per cent. “The total CPI inflation for November is lower than our estimate,” said Aditi Nair, ICRA’s principal economist.
Retail prices of vegetables have benefited stability. This is comforting news but not enough to reduce policy rates. 1114 urban markets were selected and price statistics were collected from 1181 villages. This includes all the States / UTs. These data were collected face to face at selected locations by the staff of NSO’s Regional Operations Unit.