Indicating worsening of the price situation, inflation - wholesale as well as retail - spurt in September because of costlier food items, especially onion and vegetables, dimming the prospects of rate cut by RBI later this month to boost the sagging economy.
While the Wholesale Price Index (WPI) based inflation climbed to 7-month high of 6.46 per cent, the one based on Consumer Price Index (CPI) inched closer to double digit at 9.84 per cent, according to government data released today.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said inflation is "uncomfortably" high but expressed hope that it would come down in the coming months within the comfort zone of 5-6 per cent.
Deteriorating price situation will make the Reserve Bank task of reducing interest rate - being demanded by the industry - difficult at monetary policy review on October 29.
Facing slowdown, industry wants RBI not to contemplate any rate hike to rein in inflation as economic growth has already slipped to 4.4 per cent in the first quarter of this fiscal, and the industrial growth has been nearly flat at 0.6 per cent in August (latest data).
As per the WPI data, inflation was 6.1 per cent in August and 5.85 per cent (revised upward from 5.79 per cent) in July. In September last year, it was 8.07 per cent.
The sharpest increase was noticed in onion prices which jumped by 322.94 per cent over the same month last year.
Vegetables in general were costlier by 89.37 per cent year-on-year making life difficult for the common man.
Fruits too were costlier by 13.54 per cent year-on-year during September.
Overall, the food inflation increased at higher rate in September at 18.40 per cent as compared to the previous month. Inflation in this segment was 18.18 per cent in August.
The price situation was similar as per the CPI data with vegetable prices rising 34.93 per cent in September.
