High eatable prices keep inflation near double digit in Sept

In August, it was 10.03 per cent, according to the Consumer Price Index (CPI) data released today.

The highest rise in prices last month was in sugar, up 19.4 per cent, year-on-year basis.

In urban areas, retail inflation moderated to 9.72 per cent in September, compared to 10.19 per cent in August. The retail price rise in rural areas worked out to 9.79 per cent during September down from 9.9 per cent in the previous month.

CPI for September, however, did not fully capture the impact of hike in diesel price, announced by the government on September 13, to help the Oil Marketing Companies (OMCs) to reduce their under recoveries.

CPI for edible oils during September increased by 18.54 per cent, pulses by 16.2 per cent. Vegetable prices also grew by 14.3 per cent, while meat and fish and egg rates rose by 12.06 per cent.

The Reserve Bank in its mid-quarter monetary policy last month had raised concerns about the price situation saying "as inflationary tendencies have persisted, the primary focus on monetary policy remains the containment of inflation and anchoring of inflation expectations".

The central bank had refrained from reducing the key pending rates despite persistent pressure from industry to cut them to promote sagging economic growth.

Meanwhile, industrial growth has slowed to 2.7 per cent in August, compared to 3.4 per cent in the same month last year, which indicates persistent sluggishness in the economy.

This may prompt RBI to cut key interest rates in its second quarter review on October 30.