New Delhi, Dec 13 (FN Agency) India’s retail inflation measured by Consumer Price Index (CPI) rose 4.91% year-on-year in November, but remained well within the tolerance level of Reserve Bank of India (RBI). The retail inflation was 4.48% in October 2021 and 6.93% in November 2020. As per the data released by National Statistical Office (NSO), food inflation in November, 2021 was 1.78% as compared to 0.85% in the previous month. Retail inflation has inched up over the last few months primarily due to a rise in food and vegetable prices. “With input price pressures forcing producers to raise prices in many sectors, the November 2021 CPI inflation accelerated slightly faster than we had expected, shrugging off the favourable base effect and the cut in fuel taxes,” said ICRA Chief Economist Aditi Nayar.
She said that as long as the CPI inflation remains within the target of 2-6%, the MPC (Monetary Policy Committee) and RBI will prefer to prioritize growth, and maintain policy support to impart durability and sustainability to the recovery. The RBI is mandated to maintain price stability in the country and keep retail inflation at 4% with a margin of 2% on either side. “Although not a concern at present, elevated price levels will discomfort consumers when demand levels improve. Considering the high inflationary expectations, RBI will be watchful of the inflation level, and we hope that benign interest rates continue considering capital intensive sectors like real estate are strongly influenced by credit costs at both consumer and developer level,” said Vivek Rathi, Director (Research) at Knight Frank India. The RBI in its bi-monthly monetary policy last week maintained status quo keeping all rates unchanged and retaining accommodative stance to support economic recovery.