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Breaching the Reserve Bank of India’s (RBI’s) comfort zone, the retail inflation measured in Consumer Price Index (CPI) spiked to a 15-month high of 7.44 per cent in July, much higher than 4.87 per cent in June, as tomatoes, vegetables and other food items turned costlier. The inflation overshoots the RBI’s comfort level for the first time in the current fiscal. The RBI has the mandate to keep retail inflation in the range of 2 to 6 per cent and after remaining above the upper limit for most of the 2022-23 financial year. Retail inflation stood at 6.71 per cent in July 2022 and the previous high was recorded at 7.79 per cent in April 2022.

The CPI-based inflation in the food basket was at 11.51 per cent in July, significantly up from 4.55 per cent in the preceding month, and 6.69 per cent in July 2022. The National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation in its data has showed that Rural CPI (General) in July 2023 stood at 7.63 per cent as against 4.78 per cent in June. The Urban CPI (General) stood at 7.20 per cent in July as against 4.96 per cent in June. The index value for Rural, Urban and Combined CPI (General) stood at 187.6, 184.7 and 186.3 respectively, in July 2023.

In July, the annual inflation in the vegetables basket was at 37.44 per cent, spices at 21.63 per cent, pulses and products at 13.27 per cent, and cereals and products at 13.04 per cent. However, the rate of price rise in oils and fats segment declined 16.8 per cent. The inflation in meat and fish, egg and fruits was in lower single digit. NSO collects the price data from selected 1,114 urban markets and 1,181 villages covering all States and Union Territories.