The Central Statistics Office (CSO) and the Ministry of Statistics and Programme Implementation, in a latest report, said the Consumer Price Index (CPI) based inflation was 3.28 per cent in September, 4.2 per cent in October previous year.
India Inc on Tuesday said the spike in inflation, which rose to a six month high of 3.59 percent in October, will ease in the coming months.
The pace of price rise of crucial services like heal-thcare, education, among others has been higher in rural areas compared to urban areas. The price of food shot up mainly due to unexpected rains, which destroyed crops. However, fruits were comparably cheaper in October on a sequential basis.
Retail inflation inched up to a seven-month high in October on the back of higher food, fuel and housing prices, dashing hopes of any cut in interest rates by RBI for now. "Similarly, the policymakers should check and address prices of products, including paddy, that are hovering at higher levels and are also of national importance", said Rawat. The inflation for sugar and confectionery items increased and settled at 6.75 per cent. Spices saw some decline in price and settled at (-) 2.15 points.More news: Missouri Opens Antitrust Investigation Into Google
But the increases were offset by the falling motor fuel and furniture prices and the costs of owner occupied housing. The GST Council's recent decision to cut the rates on around 200 items is likely to further dampen the rate of price rise of these items.
Commenting on the Reserve Bank of India's (RBI) expected reaction to the inflation numbers released before its monetary policy review meet on December 6, Jaikishan J. Parmar, Research Analyst at Angel Broking, said: "Firstly, the CPI inflation is still well within the RBI comfort zone of 4 per cent".
Crude prices have rallied, sending Brent crude to its highest since June 2015, a worry given that India imports most of its energy needs.