India’s retail inflation or Consumer Price Index (CPI), declined to 5.88 per cent in November as against 6.77 per cent in October. CPI eased sharply to an 11-month low mainly due to softening prices of food items, official data showed on Monday. Inflation came within the Reserve Bank of India’s (RBI) tolerance band of 2-6 per cent for the first time this year.
The government has mandated the RBI 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.
National Statistical Office (NSO) Consumer Price Index Numbers, the food inflation stood at 4.67 per cent in November, against 7.01 per cent in the previous month. Retail inflation was 4.91 per cent in November last year while food inflation was 1.87 per cent.
According to the latest data, rural CPI was down 6.09 per cent in November from 6.98 per cent in October, while urban CPI declined to 5.68 per cent in November from 6.50 in October.
CPI has come under the Reserve Bank’s upper tolerance threshold of 6 per cent since January, retail inflation has declined to its lowest level in 11 months. The retail inflation stood at 5.66 per cent in December 2021.
Last week, the Reserve Bank had last week said the worst of inflation is behind us, but there is no room for complacency in the fight against price rise. The central bank said that it will keep ‘Arjuna’s eye’ on the evolving inflation dynamics and projected inflation to remain above 4 per cent for the next 12 months.
Last week, the RBI hiked the benchmark rate by 35 basis points to 6.25 per cent. Retail inflation is estimated to remain at 6.6 per cent from October to December before cooling to 5.9 per cent from January to March next year and 5 per cent from April to June 2023, as per the latest RBI forecast.