A view of a vegetable market in New Delhi. File
| Photo Credit: Sushil Kumar Verma
India’s retail inflation pace eased to a four-month low of 4.87% in October from a tad over 5% in September, with the rise in vegetables prices easing to 2.7% from 3.4% even though overall consumer food price inflation remained virtually unchanged at 6.6%.
Inflation faced by rural consumers eased from 5.33% in September to 5.1%, but urban households saw a fractional increase in inflation at 4.65%. On a month-on-month basis, consumer prices were up 0.65%, while food prices were up 1.06%, with urban food prices rising 1.14%.
While base effects from last October, when retail prices surged 6.8%, helped cool the headline inflation rate, some deceleration was also seen in prices of non-food items such as services, clothing and footwear as well as fuel and light. Aided by the LPG cylinder price cuts, fuel and light costs dropped 0.4% from last October’s levels.
The Reserve Bank of India, which expects retail inflation to average 5.6% between October and December, is likely to still remain watchful of the food price situation, which reversed sequential direction from a 2.2% month-on-month drop in September.
While there was some slight relief in the inflation rates for cereals (from 11% in September to 10.65% in October), meat and fish (from 4.1% to 3.3%), milk (down from 6.9% to 6.44%) and Spices, which remained elevated at 22.8% in October, these were offset by gains on other fronts.
The pace of price rise in key protein sources like pulses and eggs accelerated sharply to 18.8% and 9.3%, respectively, inflation in fruits and sugar also picked up pace to hit 9.34% and 5.5%.
While the rise personal care services’ prices eased a bit to 7.84% from 8.5% in September, as did education (down to 5.07% from 5.3%), healthcare inflation remained sticky at 5.9%. Transport and communication inflation dropped to 2% from 2.3% in the previous month, and clothing and footwear inflation receded to 4.3% in October from 4.6% in September.
