New Delhi: India’s annual retail inflation rose to 4.81 percent in June from 4.31 percent in the previous month (May). This information came out from the government data on Wednesday. Four months of softening was broken due to the rising prices of vegetables.
Food inflation, which accounts for nearly half of the overall consumer price basket, rose to 4.49% from a revised 2.96% in May.
Vegetable prices may increase further in the coming months due to erratic and incessant rains in North India. In June, the prices of vegetables increased by 12% on a month-on-month basis.
Inflation, however, remains within the Reserve Bank of India’s comfort label of below 6 percent. The government has tasked the central bank to ensure that retail inflation remains at 4 percent with a margin of 2 percent on either side. The central bank primarily takes into account the CPI to arrive at its bi-monthly monetary policy decision. The next policy review is to be held early next month.
As far as the details are concerned, inflation for food items stood at 4.49 percent in June — which was higher than the 2.96 percent recorded in May. The food basket accounts for nearly half of the CPI.
Last month, the Reserve Bank kept policy rates unchanged at 6.5 percent and projected retail inflation to average 5.1 percent for the current fiscal. Inflation was pegged at 4.6 percent in the June quarter.
