NEW DELHI: Two days after Reserve Bank of India governor Shaktikanta Das said inflation was cooling, government data released on Monday showed that both retail and wholesale inflation indeed moderated in October.
According to data released by the National Statistical Office, retail inflation cooled to a three-month of 6.77% in the month, thanks to the easing of food prices. The inflation had stood at 7.41% in September, while it was at 4.48% in October last year.
Notably, food and beverages inflation cooled to 7.04% in October from 8.41% a month ago. RBI is supposed to maintain inflation at 4% with a margin of 2% on either side. As it failed to do so, it has sent a report to the Centre giving reasons for the high prices and steps it has undertaken to control it.
“The inflation trajectory since last quarter has been moving in the direction portrayed by the RBI in its monetary policy. We expect retail inflation to be in the neighbourhood of 6.5% mark as projected by RBI in 3QFY23,” said Sunil Sinha, principal economist at India Ratings & Research.
According to Crisil’s chief economist Dharmakirti Joshi, core inflation remains sticky at 6%. “Its major components (clothing and footwear, recreation, personal care and effects) are up on-year, indicating recovering demand allowed producers to pass on higher input costs to selling prices.”
The wholesale price-based index also dropped to 8.39%, on lower food and fuel prices. It was at 10.7% in September. The decline was due to the fall in the prices of mineral oils, basic metals, fabricated metal products, textiles, minerals etc, the commerce ministry said.
Govt measures working: FinMin
The finance ministry said the “drastic decline” in October retail inflation is mainly due to a dip in food price inflation
The impact of government measures to check price rise would be felt more significantly in the coming months, it added
“Prices of commodities like crude oil, iron ore & steel sobered in global markets. This, coupled with measures taken by the government to rationalise tariff structures of major inputs to augment domestic supply, helped to keep cost-push inflation in consumer items under control,” the ministry said