The Consumer Price Index (CPI) or retail inflation of India stayed over the RBI's target band for the second month in a row. The provisional CPI inflation data comes at 6.26% in June 2021 compared to the final 6.30% in the previous month.
Meanwhile, the Consumer Food Price Index (CFPI) rises to 5.15% in June 2021 against 5.01% in May 2021.
In category-wise, the inflation rate of Food and beverages was at 5.58%, while the rate for Pan, tobacco and intoxicants came in at 3.98% in June this year.
Further, clothing and footwear inflation were at 6.21%, while housing inflation stood at 3.75%. Fuel and light inflation was at 12.68% in June 2021.
According to the Ministry of Statistics & Programme Implementation, the Price data are collected from representative and selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of June 2021, NSO collected prices from 99.6% villages and 98.6% urban markets while the Market-wise prices reported therein were 78.7% for rural and 82.0% for urban.
In its June 2021 monetary policy statement, RBI said that going forward, the inflation trajectory is likely to be shaped by uncertainties impinging on the upside and the downside. The rising trajectory of international commodity prices, especially of crude, together with logistics costs, pose upside risks to the inflation outlook. Excise duties, cess and taxes imposed by the Centre and States need to be adjusted in a coordinated manner to contain input cost pressures emanating from petrol and diesel prices.
RBI further said that a normal southwest monsoon along with comfortable buffer stocks should help to keep cereal price pressures in check. Recent supply-side interventions are expected to ameliorate the tightness in the pulses market. Further supply-side measures are needed to soften pressures on pulses and edible oil prices. With declining infections, restrictions and localised lockdowns across states could ease gradually and mitigate disruptions to supply chains, reducing cost pressures. Weak demand conditions may also temper the pass-through to core inflation.
That said, RBI has projected CPI Inflation at 5.1% during 2021-22: 5.2% in Q1; 5.4% in Q2; 4.7% in Q3; and 5.3% in Q4:2021-22; with risks broadly balanced.
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