Retail inflation rises to 7.41% in September; Congress attacks PM, FM
Retail inflation spiked to a five-month high of 7.41% in September, mainly due to costlier food items.
For the ninth month in a row, retail inflation has remained above the Reserve Bank of India’s (RBI) tolerance level of 6%.
Official data released on Wednesday (October 12) showed that the retail inflation based on Consumer Price Index (CPI) was at 7.41% in September.
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RBI to submit report
It was at 7% in August and 4.35% in September 2021.
Inflation in the food basket rose to 8.60% in September this year from 7.62% in August.
With inflation remaining above the 6% level, RBI, now, will have to give a report to the central government giving reasons for failure to contain inflation at 4% with a bias of 2% on either side.
The central government has mandated RBI to ensure that retail inflation remains in the range of 2-6%.
Also read: IMF praises RBI for tightening the monetary policy to curb inflation
Congress hits out at Centre
The Congress attacked the BJP government over the spike in retail inflation and questioned Prime Minister Narendra Modi.
“Govt data released today shows consumer price index in Sept saw highest rate of increase in 5 months & retail food price inflation was 8.6%, up 1% from previous month. But does the PM care? FM went to a Chennai market that made for nice visuals but price rise continues unabated,” Congress leader Jairam Ramesh tweeted.
Govt data released today shows consumer price index in Sept saw highest rate of increase in 5 months & retail food price inflation was 8.6%, up 1% from previous month. But does the PM care? FM went to a Chennai market that made for nice visuals but price rise continues unabated.
— Jairam Ramesh (@Jairam_Ramesh) October 12, 2022
In September, RBI Governor Shaktikanta Das said acute imported inflation pressures felt at the beginning of this fiscal year have eased but it still remains elevated across food and energy items.
Also read: RBI needs to be more synchronised to curb inflation, says Nirmala Sitharaman
What FM said in the US
During her ongoing visit to the US, Finance Minister Nirmala Sitharaman on Tuesday said her Budget for the next financial year would be ‘very carefully structured’ to help the economy sustain growth momentum and rein in prices.
She identified high energy prices among the biggest problems facing the Indian economy in the near future.
Also read: World Bank lowers India’s growth projection to 6.5% in FY 2022-23
“Specifics (of the next budget) may be difficult at this stage because it’s a bit too early. But broadly, the growth priorities will be kept absolutely on the top. Even as I speak about the concerns that inflation brings before me. So, inflation concerns will have to be addressed. But then how would you manage growth would be the natural question,” Sitharaman said in Washington DC.
Earlier this month, Finance Minister Nirmala Sitharaman had said inflation is at a manageable level and the Indian economy is seen as a sweet spot the world over, as a result of which there will be a lot of interest from investors.
“Our inflation is at a manageable level. Yesterday, RBI’s announcement also sent a very positive message to the markets,” she had said.
Industrial production contracts
Meanwhile, India’s industrial production contracted 0.8% in August, according to the official data released on Wednesday.
The IIP had grown 13% in August 2021.
As per the Index of Industrial Production (IIP) data released by the National Statistical Office (NSO), the manufacturing sector’s output contracted 0.7% in August 2022.
Also read: RBI to launch e-rupee on pilot basis, releases concept note
The mining output contracted 3.9%, while power generation increased 1.4% during August.
In April 2020, industrial production had contracted 57.3% due to a decline in economic activities in the wake of the lockdown imposed to curb the spread of coronavirus infections.
(With agency inputs)