India’s retail inflation in November declined to 5.48% as compared to 6.21% in October, falling within the Reserve Bank of India’s (RBI) comfort band of 2-6%. The decline in inflation is mainly due to the decline in inflation in the food and beverages group.
Corresponding inflation rates for rural and urban areas in November are 5.95% and 4.83%, respectively, according to official data released by the Ministry of Statistics and Programme Implementation. Food inflation in November was at 9.04%, versus 10.87% in October. The decline in food inflation is attributed to a significant decline in inflation in vegetables, pulses and products, sugar and confectionary, fruits, eggs, milk and products, spices, transport and communication, and personal care and effects subgroups.
The top five items showing the highest year-on-year inflation at an all-India level in November 2024 are garlic, potato, cauliflower, cabbage, and coconut oil. The key items having the lowest year-on-year inflation in November are jeera, ginger, LPG-excluding conveyance, and dry chilies.
Food prices continue to remain a pain point for policymakers in India, who aim to bring retail inflation to 4% on a sustainable basis. However, the latest inflation data suggests that inflation is under control.
The RBI has kept the repo rate elevated at 6.5% to keep inflation contained. The repo rate is the rate of interest at which the RBI lends to other banks. Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory quite well.
