NEW DELHI: Retail inflation marginally increased to 3.65% in August and remained within the Reserve Bank's target of 4%, the government data showed on Thursday. The inflation also was below 4% in July.
"Year-on-year inflation rate (3.65%) based on All India Consumer Price Index (CPI) for the month of August, 2024, is second lowest in the last five years," National Statistical Office (NSO) said.
The Consumer Price Index (CPI) based retail inflation was 3.6% in July 2024 and 6.83% in August 2023.
Inflation in the food basket was 5.66% in August, marginally up from 5.42% in July, according to the data released by the National Statistical Office (NSO).
Vegetables and pulses witnessed price rise in double digits, according to official data released on Thursday.
According the data released by NSO, inflation in vegetables was 10.71% and in 'pulses and products' at 13.6%.
The CPI was in negative in case of spices (-4.4%) and 'oils and fats' (-0.86%).
Food inflation for August 2024 is the second lowest since June 2023.
"At item level, tomato has exhibited the lowest year on year inflation (-47.91%) as well as lowest MoM change in index (-28.8%)," NSO said.
Inflation in case of 'fuel and light' segment too was in negative at (-) 5.31%.
The data showed that retail inflation was at 3.14% at urban centres and 4.16% in rural areas.
The highest inflation was in Bihar at 6.62% and lowest in Telangana at 2.02%.
Inflation has remained below 6% since September 2023.
Commenting on the data, Aditi Nayar, chief economist, ICRA, said that with the base effect normalising, "we anticipate a sharp pickup in the CPI inflation to about 4.8% in September 2024, and range between 4.4% and 4.7% in H2 FY2025".
"Although the core-CPI inflation eased slightly to 3.5% in August 2024 from 3.6% in July 2024, this is likely to be an intermittent dip; we expect the core CPI inflation print to inch up through the rest of the fiscal, in spite of the recent moderation in commodity prices, on account of demand for services, as well as the YoY decline in the sowing of cotton," she said.
NSO collects the price data from selected 1,114 urban markets and 1,181 villages covering all states and UTs.
During August 2024, NSO collected prices from 100% villages and 98.6 % urban markets.
The government has tasked the Reserve Bank of India (RBI) to ensure that the CPI inflation remains at 4% with a margin of 2% on either side.