Apart from them, the other three states that have inflation rate closing to 9% are Haryana, West Bengal, and Tamil Nadu.
Retail inflation (CPI) in India stood at a 68-month high in the month of January but the impact is mostly felt in the three Indian states. The inflation rate in these states has almost touched the 10 per cent mark, which is far beyond RBI’s upper benchmark. These states are Uttar Pradesh, Odisha and Telangana, which have recorded the inflation rate as 9.7 per cent, 9.72 per cent, and 9.55 per cent respectively, according to the data released by the Ministry of Statistics & Programme Implementation. Apart from them, the other three states that have inflation rate closing to 9 per cent are Haryana, West Bengal, and Tamil Nadu.
The culprit for the high retail prices is food inflation but there is a fresh concern too now. “The increase is largely due to the sustained increase in food inflation (13.63 per cent), particularly of meat and fish (10.5 per cent), vegetables (50.12 per cent) and pulses (16.7 per cent). This is also due to the base effect coupled with a sharp uptick in the prices of fuel (3.66%) and telecom tariffs,” said M Govinda Rao, Chief Economic Advisor, Brickwork ratings.
The food inflation is likely to subside in the coming months, but rising core inflation up from 3.5 per cent to 4.2 per cent is a cause for renewed concern as there is the fear of further escalation in the prices of services items, he added.
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Meanwhile, The CPI-based retail inflation stood at 7.59 per cent up from 7.35 per cent last month. The December inflation figure was the highest since May 2014. Despite the continued slowdown, the RBI did not cut the interest rates in the last two MPC meet, on the back of high inflation rate and now when the inflation has even crossed the revised upper benchmark of the Reserve Bank, it further seems unlikely for the central bank to cut rates. “Higher inflation suggests that the RBI will not ease monetary policy even as industrial activity loses momentum,” said Rumki Majumdar, Economist, Deloitte India