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India's consumer price inflation rises as food prices soar

Dubai - The CPI inflation more than doubled last month from over 3 per cent recorded during July 2019.

A substantial rise in food prices lifted India's July retail inflation to 6.93 per cent from 6.23 per cent in June, official data showed on Thursday. India's consumer food price index during the month under review rose to 9.62 per cent from 8.72 per cent reported for June 2020.
The CFPI readings measure the changes in retail prices of food products. "As the various pandemic related restrictions were gradually lifted and non- essential activities started resuming operations, availability of price data has also improved," the National Statistical Office (NSO) said.
"The NSO collected prices from 1,054 (95 per cent) urban markets and 1,089 (92 per cent) villages during the month of July 2020," it said.
On a year-on-year (YoY) basis, the CPI inflation more than doubled last month from over 3 per cent recorded during July 2019. The data showed that CPI Urban rose to 6.84 per cent in July from 6.12 per cent in June. The CPI rural increased to 7.04 per cent last month from 6 .34 per cent in June.
Consequently, the data assumes significance as the Reserve Bank of India in its last monetary policy review maintained the key lending rates on account of rising retail inflation. The Reserve Bank's target for retail inflation is set within a band of +/- 2 per cent.
As per the data, the CPI YoY inflation rate for vegetables and pulses jumped by 11.29 per cent and 15.92 per cent, respectively, in July. Furthermore, meat and fish prices rose 18.81 per cent and eggs became dearer by 8.79 per cent. In addition, the fuel and light category under CPI rose by 2.80 per cent.
Rahul Gupta, head of research- currency, Emkay Global Financial Services, said: "The July inflation surged by 6.93 per cent from 6.09 per cent in June. The CPI has come much higher than the market expectations; Reuters poll was of 6.18 per cent. The CPI remains above RBI's target range mainly due to uptick in food inflation. Despite the nationwide lockdown is easing, the food inflation still remains a concern as regional lockdown still persists. Eventually, with better monsoon and further easing of lockdown, we can expect inflation to come under RBI's target range. But until the CPI hovers above 6per cent, RBI will remain hesitant on cutting repo rate.''
- With inputs from IANS, sandhya@khaleejtimes.com