September WPI inflation at 6.46% Vs 6.1% (MoM)

Higher prices of onion along with other vegetables and fruits pushed up inflation for the fourth month in a row to 6.46 per cent in September, making it difficult for the RBI to cut rate in the monetary policy review due later this month.

The inflation, based on wholesale price index (WPI) was at 6.1 per cent in August and 5.85 per cent in the previous month. A CNBC-TV18 poll of economists had pegged the number at 6 percent.
The core inflation rose to 2.1 percent versus 1.9 percent (month on month). Meanwhile, July WPI was revised to 5.85 percent versus 5.79 percent (prov) earlier.
The sharpest increase was witnessed in case of onion prices which jumped by 323 per cent year on year in September. The price of vegetables in general rose by 89.37 per cent making life difficult for the common man. Fruits too were costlier by 13.54 per cent year-on-year during the month.
As per data released by the government today, the food inflation stood at 18.40 per cent in September over the same month last year. The food prices had shot up 18.18 per cent in the previous month.
Inflation in the LPG (liquefied petroleum gas) and petrol was at 9 per cent and 9.64 per cent, respectively, on annual basis. However, there was decline in prices of egg, meat, fish and manufactured food items like beverages and tobacco products. Overall, inflation in manufactured items showed a moderate increase of 2.03 per cent during the month on annual basis.
The government has put in mechanisms to cool food price pressure, says Planning Commission deputy chairman Montek Singh Ahlulwalia told reporters. He assures that the impact of these steps will be seen once the Q2 GDP data is out. A comfortable range for inflation would be from 5-6%," he says.
The Reserve Bank is scheduled to unveil its second quarter review of monetary policy on October 29 and will have to take into account the rising inflation while announcing steps to boost economic activities.
Earlier, the Index of Industrial Production (IIP) growth slowed to 0.6 percent in August from an upwardly revised 2.75 per cent pace in July, hurt by weak investment and consumer demand, government data showed. Inflation internals:

• Food Articles Inflation At 18.40% Vs 18.18% (MoM)
• Food Articles Index Up 0.8% (MoM)
• Primary Articles Inflation At 13.54% Vs 11.72% (MoM)
• Primary Articles Index Up 1.5% (MoM)
• Manufactured Pdts Inflation At 2.03% Vs 1.90% (MoM)
• Manufactured Products Index Up 0.7% (MoM)
• Fuel & Power Group Inflation At 10.08% Vs 11.34% (MoM)
• Fuel & Power Group Index Up 2.6% (MoM)
• All Commodities Index Up 1.2% (MoM)
• Non-food Articles Index Up 2% (MoM)
• Minerals Group Index Up 6.4% (MoM)

With inputs from PTI