Annual Inflation rate drops, Retail Inflation on a 13-month low

New Delhi: A drop in the India’s annual inflation rate based on the Wholesale Price Index has resulted to thirteen month low of 4.31 per cent in the retail inflation in the month of September. The drop has mainly recorded on vegetable prices and has created headroom for further rate cuts by Reserve Bank of India in coming months.

According to the rate on wholesale prices eased on month-on-month basis to 3.57 percent in September from 3.74 per cent in August.

The WPI has cumulatively risen by 4.28 per cent in the current fiscal after 17 months of contraction. The index had earlier risen in April last for the first time and has seen a downfall since then.

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Retail inflation goes down:

• The Consumer Price Index measured the retail inflation which was measured as 5.05 per cent in the month of August last has recorded as 4.31 per cent in September month of current fiscal.
• The retail inflation was measured 4.41 per cent in September 2015 by the CPI. The previous low of 3.74 per cent was recorded in August last year
• The data released by the Ministry of Statistics and Programme Implementation further said CPI based inflation in fuel and light segment was up at 3.07 per cent in September in comparison to 2.49 in August.

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RBI rate cut policy:

• The Reserve Bank of India takes into account retail inflation while deciding on its key lending rate. Inflation remains a key concern for policy makers and it has decelerated sharply to 3.88 per cent in September compared with 5.91 per cent in August.
• Earlier this month RBI had cut the key interest by 25 basis points and now when the inflation has eased further RBI may consider another cut in December monetary policy review to boost industrial growth.