In September, retail inflation decreased to its lowest level in three months as food prices stabilised, providing much-needed relief from rising price pressures. In August, industrial production growth reached a 14-month high, driven by a strong manufacturing sector.
Retail inflation, as measured by the Consumer Price Index (CPI), increased an annual 5% in September, according to data issued by the National Statistical Office (NSO), slower than the 6.8% increase in August and below the Reserve Bank of India's (RBI) 6% upper tolerance zone. The food price index decreased from nearly 10% in the previous month to 6.6% this month. Inflation in rural areas was 5.3%, compared to 4.7% in urban areas. Moderation in prices was largely led by an easing of vegetable and cooking gas prices.
Finance minister Nirmala Sitharaman said the government has already taken preemptive measures to restrain food inflation, which is likely to subside price pressures in the market soon.
RBI governor Shaktikanta Das said the September retail inflation data was in line with the central bank’s internal assessment and said the sharp spike in the past was a temporary phenomenon. “But due to active cooperation, we knew it was a temporary spike and it would moderate in two months. We did not do a knee-jerk reaction and continued with the pause. But we were directly engaged with the government, which undertook certain measures (to cool down prices).