India’s retail inflation eases to 4.35% in September

Retail inflation declined to 4.35 per cent in September, mainly due to lower food prices, according to government data released. The Consumer Price Index-based (CPI) inflation was at 5.30 per cent in August and at 7.27 per cent in September 2020. As per the data released by the National Statistical Office (NSO), the inflation in the food basket eased to 0.68 per cent in September 2021, significantly down from 3.11 per cent in the preceding month.

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According to RBI:

• The Reserve Bank of India (RBI), which mainly factors in CPI-based inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep it at 4 per cent, with a tolerance band of 2 per cent on either side.
• The CPI headline momentum is moderating, which combined with favourable base effects in the coming months could bring about a substantial softening in inflation in the near term.
• RBI has projected the CPI inflation at 5.3 per cent for 2021-22: 5.1 per cent in the second quarter, 4.5 per cent in the third; 5.8 per cent in the last quarter of the fiscal, with risks broadly balanced.

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