Retail inflation breaches RBI's 6% threshold

October print at 14-month high as food prices climbed sharply; IIP picked up in September

- ASIT RANJAN MISHRA

Retail inflation galloped to a 14-month high of 6.2 per cent in October, spurred by a spike in food prices, thus breaching the upper threshold of the Reserve Bank of India's (RBI) target range. This sharp increase apparently extinguishes any remaining hopes of a policy rate cut when the RBI's Monetary Policy Committee (MPC) convenes from December 4-6.

Separately, industrial production appears to be on the rebound. The index of industrial production (IIP) grew by 3.1 per cent in September, buoyed by festival-driven demand, reversing a contraction in August. Data released by the National Statistical Office (NSO) revealed that Consumer Price Index (CPI)-based food inflation on a year-on-year basis surged to 10.87 per cent in October—the highest in 15 months—fuelled by soaring prices for vegetables (up 42.18 per cent), fruit (8.43 per cent), oils and fats (9.51 per cent), and cereals (6.94 per cent).