Inflation rises to 7.81% as wheat, diesel prices soar
Inflation rose to its highest level this fiscal at 7.81 per cent in September as prices of wheat, cereals and diesel soared, a development that may restrain RBI from cutting interest rates at its monetary policy later this month.
Inflation, as measured by the Wholesale Price Index (WPI), was 7.55 per cent in August.
In September last year, however, it was 10 per cent.
In the food articles category, wheat turned expensive by 18.63 per cent, up from 12.85 per cent in August. Cereals too became dearer by 14.18 per cent, from 10.7 per cent in the previous month.
Inflation in diesel shot up to 8.94 per cent during the month, from 0.36 per cent, following government raising prices of the petro-product by over Rs 5 per litre on September 13.
For the fuel and power category, inflation surged 11.88 per cent from 8.32 per cent. Besides diesel, aviation turbine fuel and kerosene became expensive.
Food inflation, as a category, declined to 7.86 per cent during the month, from 9.14 per cent in the previous month.
Food articles have 14.3 per cent share in the WPI basket.
Year-on-year basis, however, potatoes were costlier by 52.20 per cent and rice by 12.41 per cent.
In the manufactured items category, prices rose for cotton textiles, paper and paper products, rubber and plastic products.
The rate of price rise in the manufactured products was 6.26 per cent in September, as against 6.14 per cent in August.
The Reserve Bank is scheduled to unveil its policy on October 30. Industry has been demanding a rate cut in view of fiscal measures taken by the government, but the high level of inflation may dissuade RBI from easing the policy.