New Delhi, There has been a big increase in retail inflation in the month of September. Retail inflation rose by 0.41 per cent in a month, despite the Reserve Bank’s continuous hike in policy interest rates, making the rate of inflation the highest in the last six months since April. Retail inflation stood at 7.41 per cent in September, up from 7 per cent in August a month ago. With this, for the ninth consecutive month, the rate of retail inflation exceeded the maximum limit set by the Reserve Bank of India.
Rising food prices have led to an increase in the rate of retail inflation. Inflation in September rose by 0.41 per cent to 7.41 per cent, the highest since April this year. Inflation was 7 per cent in August and before that it was 6.71 per cent in July. On a year-on-year basis, retail inflation based on consumer price index was 5.3 per cent in August and 4.35 per cent in September 2021. That is, in September this year, retail inflation has increased by more than three percent compared to last year.
The main reason for the rise in inflation is believed to be the rise in the prices of cereals and vegetables. However, the government has banned the export of many items or imposed a separate tax to control the prices of food grains. However, the inflation rate for food items has reached 8.60 per cent in September, from 7.62 per cent in August a month earlier. In the month of September, there has been an increase in the prices of food items in both urban and rural areas.
This is a very worrying situation for India because the Reserve Bank is continuously increasing the interest rates to control inflation, which is reducing the growth rate. Many agencies have reduced the growth rate and other inflation is also increasing. If inflation exceeds 6 per cent, the RBI will have to submit a report to the central government explaining why it has failed to keep retail inflation in the range of two to six per cent.
Significantly, India’s central bank has fixed the inflation rate easing limit between two to six percent. There is a ceiling of 6 per cent and retail inflation has been staying above this for the last nine months. Recently, Reserve Bank Governor Shaktikanta Das had said that the sharp imported inflationary pressures felt at the beginning of the current financial year have eased, but the pressure on food and energy is still intact.
