India’s retail inflation accelerated to 7.41% in September from 7% in August, with food price inflation surging sharply from 7.62% in August to 8.6% in September. There has been a 0.41 percent increase in the inflation rate compared to August.
September is the ninth month in a row that the inflation rate has exceeded the Reserve Bank's estimate. The Reserve Bank has pegged the inflation rate at 6 percent, but it has hovered around 7 percent for the past several months. Recently the Reserve Bank had expressed concern about this rate. If the inflation continues like this, the RBI will have to increase the repo rate again. Due to this, the interest rate of the loan will be expensive and the EMI will also increase.
Inflation official data on retail information was higher than in August released on Wednesday, the figure is released on the basis of Consumer Price Index that is CPI. Inflation based on CPI is 7.41 percent in September. Exactly one year ago in September 2021, the rate was 4.35 percent. In August this rate was 7 percent. The rise in food prices is said to be the real behind this inflation. Food inflation rate is 7.62 percent in August. In September, the food inflation rate has reached 9.60 percent.
With inflation above 6 percent, the RBI will now have to submit a report to the central government explaining the reasons for the failure of both sides to control inflation at 4 percent with a margin of 2 percent. The central government has asked the Reserve Bank to ensure the retail inflation is between 2 and 6 percent. But its rate is seen at 7 percent and above.
As inflation increases, its overall effect will seen on economic development. The main cause of inflation is high cost imports, which are imported from abroad. Inflation has moderated in many sectors, but the food and energy sectors have seen an increase. Retail inflation has been increasing steadily for the last nine months, and the government is taking several steps to curb it.