The Consumer Price Index (CPI)-based inflation or retail inflation rose to a five-month high of 7.41% in September 2022 from 7% in August 2022 on high food prices, erratic rains, and global supply-chain issues arising out of the Russia-Ukraine war, the data shared by the ministry of statistics & programme implementation shows.
With this, the retail inflation has stayed outside the Reserve Bank's tolerance band (2-6%) for three consecutive quarters. Retail inflation rose in both rural and urban areas. The CPI inflation in rural areas was recorded at 7.56%, up from 7.15% in August 2022 and 4.13% in September 2021. In urban areas, retail inflation rose to 7.27% in September 2022, from 6.72% in August 2022 and 4.57% in September 2021.
The Consumer Food Price Index (CFPI), which measures the change in retail prices of food items, or inflation in food basket in September 2022, stood at 8.60% in September 2022 against 7.62% in August 2022 and 0.68% in September 2021.
In the food basket, which comprises 45% of the index, vegetables, spices, and cereals and products recorded the highest inflation at 18.05%, 16.88%, and 11.53%, respectively, in September 2022.
Food and beverages inflation stood at 8.41% in September 2022 vs 7.57% in August 2022, while clothing and footwear saw inflation rising to 10.17% in September from 9.91% in August 2022.
The retail inflation had eased for three months straight this year -- 6.7% in July, 7.01% in June, and 7.04% in May. However, it rose to an eight-year high of 7.79% in April 2022.
High food prices remain a cause of concern for the government. In order to curb rising food prices of essential commodities, the government had earlier banned food items like rice, wheat flour, tur dal (red gram). However, the prices remain high due to inflationary pressures that have stemmed from the Russia-Ukraine war and subsequent rises in fuel and commodity prices.
The Reserve Bank of India (RBI) last month retained the inflation forecast for FY23 at 6.7% amid upside risks to food prices. In the RBI’s view, inflation is likely to be above the upper tolerance level of 6% through the first three quarters of 2022-23, with core inflation remaining high.
Meanwhile, in its estimates of industrial production for August 2022, the government said India's factory output, which is measured through the Index of Industrial Production (IIP), saw a contraction of 0.8%. The factory output had risen 13% in August 2021, the data showed.
