Retail inflation hits a 5-month high of 7.41% in September due to erratic rainfall, supply shocks

India’s retail inflation touched 7.41 per cent in September, up from 7 per cent in August, and 6.7 per cent in July, fuelled by high food prices, erratic rainfall, and supply shocks from Russia’s invasion of Ukraine. Prices of daily consumables like cereals and vegetables, which form the largest category in the inflation basket, have climbed over the past two years.
On the other hand, the factory output, measured in terms of the Index of Industrial Production (IIP), contracted by (-)0.8 per cent in August, as per data released by the Ministry of Statistics & Programme Implementation (MoSPI). 

Inflation figures in September

This is the ninth consecutive time that the CPI data has come above the Reserve Bank of India’s (RBI) upper margin of 6 per cent. Retail inflation in India has stayed above 6 per cent since January. In April, May, June, and August, it was above 7 per cent. High CPI will come as a setback to households’ spending power, especially for the poorer sections of our country.
The Narendra Modi government has mandated the central bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 2026.

The September CPI figures are as follows: