New Delhi: India’s retail price inflation, based on the Consumer Price Index (CPI), rose to 6.21 percent in October as higher prices of food items such as vegetables spiked, figures released by the Ministry of Statistics on Tuesday showed.

Retail inflation has increased from 5.49 percent recorded in September. The prices of vegetables surged by as much as 42.18 percent in October, as the late withdrawal of the monsoon this year damaged crops and reduced supply in the market.

“During the month of October, a significant decline in inflation is observed in the pulses & products, eggs, sugar & confectionery and spices subgroup. High food inflation in October is mainly due to increased inflation of vegetables, fruits, oils, and fats,” according to the official statement.

The figures showed that the prices of edible oils increased by 9.51 percent during the month while the overall food price index increased by 10.87 percent.

The year-on-year housing inflation rate for October is 2.81 percent. The corresponding inflation rate for September 2024 was 2.72 percent. The housing index is compiled for the urban sector only.

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The All India Electricity index and inflation for October 2024 are 162.5 and 5.45 percent, respectively. The corresponding index and inflation for September 2024 were 162.4 and 5.39 percent, respectively.

This is the first time that retail inflation has exceeded the RBI’s upper limit of 6 percent. The RBI is waiting for retail inflation to come down to 4 percent before it can apply for an interest rate cut to propel growth.

Reserve Bank Governor Shaktikanta Das said last week that although the RBI had shifted towards a softer, neutral monetary policy stance to spur growth, this did not mean that an interest rate cut would happen immediately.

Addressing a media event, the RBI Governor said, “A change in stance doesn’t mean there will be a rate cut in the very next monetary policy meeting.”

He said there were still significant upside risks to inflation and “a rate cut at this stage would be very risky”.

The RBI at its monetary policy review kept interest rates unchanged for the 10th straight meeting, but switched its monetary policy stance to ‘neutral’ from ‘withdrawal of accommodation.’ This had led to speculation that the way had been paved for an interest rate cut.

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–IANS

(File Photo: IANS/Kuntal Chakrabarty)