Driven by high onion and vegetable prices, headline inflation surged to 6.1 per cent in August for the straight third month, where as inflation was recorded at 5.79 per cent last month while it was 8.01% in August 2012.
Overall food items became costlier by 18.8 per cent on year on year basis.
The highest increase was witnessed in the price of onions which reported an increase of 245 per cent year on year. The price of vegetables in general rose by whopping 77.81 per cent making life difficult for the common man, with no steps being taken being taken by the government to address the price rise issue.
The inflation numbers for August will make it difficult for the Reserve Bank of India to cut the much anticipated interest rates that are due for review on later this week on Friday.
Not only onions, the high increase in prices was also seen in other essential food items like rice, cereals, egg, meat and fish.
But on the positive side, potato prices declined by about 15 per cent followed by pulses which became cheaper by 14 per cent as compared to August last year.
“The overall increase in food items was to the tune of 18 per cent. High food prices, the depreciating value of rupee have driven inflation for the month of August. The RBI governor will factor these in formulating the monetary policy review,” D.K Joshi, chief economist with Crisil told Express.
In case of manufactured items, sugar and edible oils went cheaper by 4.2% and 3.86% respectively. Overall, manufactured items showed an increase of 1.9% during the month on annual basis.
The new Governor of Reserve Bank Raghuram Rajan, who is scheduled to come out with his first credit policy on September 20, will have to take into account the rising inflation while announcing steps to boost sagging growth.