In October, retail inflation in India increased to 6.21%. Compared to September’s 5.49 percent, this is a notable gain. The primary cause of this increase is the cost of food. Inflation has surpassed the Reserve Bank of India’s 6 percent threshold for the first time since August. One of the main concerns is the increase in onion prices.
Mainly due to persistently high food costs, India’s retail inflation surged to a 14-month high of 6.21 percent on an annual basis in October, up from 5.49 percent the month before and beyond the central bank’s tolerance level.
Read Also: September saw a nine-month high of 5.5% in retail inflation in India, beyond the RBI’s target of 4%
The October inflation rise was the first time since August 2023 that the print exceeded the Reserve Bank of India‘s (RBI) 6% tolerance threshold. For the first time since July, the inflation figure in September exceeded the RBI’s medium-term target of 4% to reach a nine-month high. According to government data released on Tuesday, retail inflation in India was 4.87 percent during the same period last year.
Inflation for food, which accounts for about half of the Consumer Price Index (CPI) basket, increased from 9.24% in September to 10.87% in October. While urban inflation increased to 5.62 percent from 5.05 percent in September, rural inflation also accelerated to 6.68 percent from 5.87 percent.
Inflation rate in India 2024
India’s retail Inflation rate 2024 rose to 6.21% in October. This is a significant increase above the 5.49 percent in September. The price of food is the main reason for this increase. For the first time since August, inflation has risen above the Reserve Bank of India’s 6 percent target. The rising cost of onions is one of the primary issues.
The Finance Ministry suggested in its 2023–24 survey report that India’s monetary policy framework should target inflation, excluding food, because supply considerations have a greater influence on food prices than demand.
This is not the first time the government has brought this up. Anantha Nageswaran, the Chief Economic Advisor (CEA), had earlier emphasized the necessity of removing food from India’s inflation framework.
