Consumer price index-based inflation fell to a six-month low of 9.73 per cent in September, compared with 10.03 per cent in August, despite the partial impact of a rise in diesel prices. Since the launch of the revised consumer price index (CPI) in January, this was the first time inflation in rural regions was higher than that in urban areas. For urban areas, retail inflation fell to 9.72 per cent in September, compared with 10.19 per cent in August.
In rural areas, it stood at 9.79 per cent in September, against 9.9 per cent in August.
Despite the government raising diesel prices by Rs 5 a litre, fuel and light inflation fell from 7.55 per cent in August to 7.29 per cent in September. However, as diesel prices were raised on September 13, the indirect impact of the rise would be evident from October.
Inflation for other broad categories — clothing, bedding, footwear, food & beverages — showed a decline in September, compared with August.
However, for oil and fat, inflation rose to 18.54 per cent from 18.41 per cent in August, while for sugar, it rose to 19.4 per cent from 17.51 per cent in the previous month. Inflation for pulses rose from 16.04 per cent in August to 16.2 per cent in September. For eggs, meat and fish, it rose to 12.06 per cent, against 11.54 per cent in August.
Economists feel the Reserve Bank of India (RBI) may not opt for rate cuts soon, as inflation for protein-based items was still high, and the impact of the diesel price rise was yet to be felt.
Industry chambers, however, want the central bank to cut rates to kick-start the economy. “What is required now is action by RBI — a cut in the repo rate,” said Chandrajit Banerjee, director general of the Confederation of Indian Industry.
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In its mid-quarter monetary policy review last month, RBI had raised concern on the inflation front, saying, “As inflationary tendencies have persisted, the primary focus of monetary policy remains containment of inflation and anchoring of inflation expectations.”
Data on wholesale price inflation for September is expected on Monday.