After being in the lower rungs of the ladder for most of early 2024, the inflation rate has seen a steady surge in the past few months. The retail inflation rate measured through the consumer price index soared to 6.21 per cent for the month of October. This broke the RBI's inflation threshold of 6 per cent.
Manipur Record The Highest Inflation
Previously, in the month of September, the national inflation rate had surged from the low of 3.65 per cent (in August) to 5.49 per cent.
When we look at the granular data of the Indian states, we see that many states recorded an inflation number greater than the national average.
The northeastern state of Manipur reported the highest inflation rate, as the state's CPI surged to 9.69 per cent. Amongst the big states, Chhattisgarh had an inflation rate of 8.84 per cent. One of the most populous states, Bihar, reported an inflation rate of 7.83. Its neighbouring Uttar Pradesh had an inflation rate of 7.36 per cent.
Unlike last time, the inflation rate in the southern states also rose. The five south Indian states, including Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Telangana, reported a cumulative average inflation rate of 6.07 per cent. Here, Kerala, like in September, had the worst number with an RoI of 6.47 per cent.
Another northeastern state, Sikkim, reported the lowest CPI number. The former princely state had an inflation rate of 3.88 per cent in October.
Rural Inflation on Rise
This rapid surge in the inflation rate throughout the country has been fuelled by a rise in food prices, particularly staple vegetables, including onions and potatoes.
Nationally, as the combined inflation rose to 6.21 per cent from the previous 5.49 per cent. Rural inflation was the bigger contributor, compared to urban inflation. Rural inflation surged from 5.87 in September to 6.68 per cent. Meanwhile, urban inflation rose to 5.62 per cent.
Raghvendra Nath, MD, Ladderup Wealth Management, while speaking about the inflation rate said, ""India's Consumer Price Index (CPI) for October has risen to 6.21 per cent YoY, up from 5.49 per cent in September, marking the highest increase in inflation rate in the last 14 months. This increase is primarily driven by a significant surge in food inflation, which reached 10.87 per cent. Notably, vegetable prices have spiked by 42 per cent YoY, contributing substantially to the overall food inflation. With this latest data, we do not anticipate the RBI proceeding with a rate cut in December, however, its outlook on economic growth and future guidance will be critical to monitor."
