India's retail inflation for the month of August stood at 6.69 percent, according to data released by the National Statistical Office (NSO) on September 14. The consumer price index (CPI)-based inflation rate for July has been revised to 6.73 percent from 6.93 percent.
The combined food price inflation (CFPI) for August stood at 9.05 percent, against 9.27 percent (revised) in July. Inflation in the vegetables basket came in at 11.41 percent in August, against 11.29 percent in July. In the fuel and light segment, inflation for the same month was 3.10 percent, against 2.80 percent in July.
In cereals and related products, inflation stood at 5.92 percent in August against 6.96 percent in July. In meat and fish, it stood at 16.50 percent against 18.81 percent a month ago. For pulses and products, it stood at 14.44 percent in August, against 15.92 percent in July.
The consumer price index (CPI) data for the months of April and May were not released by the Centre due to insufficient data collection amid the coronavirus pandemic and the lockdown that followed.
In the last two consecutive quarters (January - March of FY 2019-20 and April - June of FY 2020-21), the average consumer price index-based inflation breached 6 percent. The Monetary Policy Committee (MPC) needs to target inflation to keep it within 4 percent, within a band of +/- 2 percent.
During its policy announcement last month month, the Reserve Bank of India (RBI) said it expects headline inflation to remain elevated in the second quarter of FY 2020-21.
RBI Governor Shaktikanta Das said food prices are expected to increase in the near term, due to broken supply chains as a fallout of the COVID pandemic. Overall inflation is expected to remain elevated in the near term because of costly petrol and diesel prices.
The central bank's Monetary Policy Committee had kept the repo rate unchanged at 4 percent and maintained its accommodative stance. Repo rate is the rate at which the RBI lends funds to commercial banks.