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With moderation in vegetables and fuel prices, India’s the Consumer Price Index (CPI)-based inflation (retail inflation) eased to a three-month low of 5.02 per cent year-on-year in September from 6.83 per cent in August. The inflation was 6.83 per cent in the preceding month and 7.41 per cent in September 2022. The previous low was in June this year when the reading stood at 4.87 per cent. Retail inflation rate fell below the Reserve Bank of India’s (RBI’s) upper tolerance level of 6 per cent for the first time in three months. RBI, which mainly factors in CPI inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on the either side.

The inflation in the food basket came down to 6.56 per cent in September from 9.94 per cent in the preceding month. The National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation in its data has showed that Rural CPI (General) in September 2023 stood at 5.33 per cent as against 7.02 per cent in August. The Urban CPI (General) stood at 4.65 per cent in September as against 6.59 per cent in August. The index value for Rural, Urban and Combined CPI (General) stood at 185.8, 182.2 and 184.1 respectively, in September 2023.

The inflation in the vegetables basket slipped to 3.39 per cent in September compared to 26.14 per cent in August. The inflation declined in the ‘oil and fats’ (-14.04 per cent) and ‘fuel and light’ (- 0.11 per cent) during the month under review. The inflation rate of cereals eased to 10.95 per cent from 11.85 per cent in August. While inflation for milk (6.89 per cent), spices (23.06 per cent), and prepared meals (4.96 per cent) eased last month, prices of fruits (7.30 per cent), sugar (4.52 per cent), and egg (6.42 per cent) and meat (4.11 per cent) saw acceleration during the month. Also, inflation of pulses spiked to 16.38 per cent in September from 13.04 per cent the previous month.