Chhattisgarh recorded an inflation rate of 2%, followed by Delhi which recorded a rate of 2.2%. 13 of the 22 states and Union territories, for which data is published every month, posted higher inflation than the overall headline number. Retail inflation eased to a three-month low in September as food prices moderated, bringing much-needed relief from surging price pressures.
Data released by the National Statistical Office (NSO) on Thursday showed retail inflation, as measured by the consumer price index (CPI), rose an annual 5% in September, slower than the 6.8% in August and below the Reserve Bank of India (RBI‘s) upper tolerance band of 6%.
Stubborn inflation rates could emerge as a major poll issue in states such as Rajasthan and Telangana, which are headed for elections next month. Four out of top five states, which had high inflation rates, are ruled by the Opposition Congress party, while one is under BJP’s control. Uttar Pradesh and Uttarakhand, which are also ruled by the BJP, recorded high inflation rates of 5.5% and 5.6% respectively. Karnataka posted a rate of 6% during September.
High inflation rates, triggered by fluctuating vegetable prices, have emerged as a major policy challenge, prompting the Reserve Bank of India (RBI) to pause its rate tightening cycle. The RBI has, in its monetary policy statement earlier this month, said that significant easing of inflation pressures from exceptionally-high level in July and August is expected to materialise in September as the impact of fleeting food price shocks wanes.
The central bank said that underlying inflation pressures are moderating, while the impact of past monetary policy actions is still unfolding. Even then, indications are that throughout much of third quarter 2023-24 food inflation pressures may not see a sustained easing, it said.