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India’s Retail Inflation 5.55 per cent in November 2023

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) is releasing All India Consumer Price Index (CPI) on Base 2012=100 and corresponding Consumer Food Price Index (CFPI) for Rural (R), Urban (U) and Combined (C) for the month of November 2023 (Provisional) in this press note. CPIs for Sub-Groups and Groups for both All India and all States/UTs are also being released.

The price data are collected from selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster.

During the month of November 2023, NSO collected prices from 99.9% villages and 98.6% urban markets while the market-wise prices reported therein were 90.0% for rural and 92.2% for urban.

According to figures issued by the Ministry of Statistics and Programme Implementation, retail inflation in India rose unexpectedly to 5.55 percent in November after falling to a four-month low of 4.8 percent in October.

A steep spike in food costs has been blamed for the increase in retail inflation. Notably, the rate of food inflation in November was 8.70%.While inflation remains within the RBI’s comfort zone, the recent spike in inflation may make the central bank’s work more difficult in the future.

The RBI‘s Monetary Policy Committee (MPC) opted to maintain the key rates steady in its most recent policy review, but cautioned that it would remain “highly alert” to take appropriate policy steps if the need arose.

“Against this backdrop, the MPC decided to keep the policy repo rate unchanged at 6.50 per cent, but remain highly alert and prepared to undertake appropriate policy actions, as warranted,” RBI Governor Shaktikanta Das said.

Meanwhile, according to government statistics, India’s Index of Industrial Production (IIP) reached a 16-month high in October 2023, increasing by 11.7% from the previous year’s equivalent period.

This is also a significant increase from September, when it increased by 4.5%.

According to Upasana Bhardwaj, chief economist of Kotak Mahindra Bank, the November CPI inflation has been “solely led by food inflation.”

“We continue to monitor the key food items as production remains a worry amidst weak sowing, lower reservoir levels and continued erratic weather conditions,” Bhardwaj said in a statement.

“Overall, the continued moderation in core inflation should provide respite to RBI (Reserve Bank of India) which should keep them on a prolonged pause mode,” she added.

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