Inflation in nearly half of major states outgrows India's Oct CPI; price pressure steepest in Chhattisgarh

India's headline retail inflation climbed to a 14-month high of 6.2 percent in October

While India's headline retail inflation slipped out of the central bank’s outer tolerance band and scaled a 14-month high of 6.21 percent in October, the price pressure seemed steeper on some of the major states.

The inflation rate in 10 out of 22 states outgrew the national average for October, with Chhattisgarh topping the list at a whopping 8.84 percent. Bihar, with an inflation rate of 7.83 percent, claimed the third spot, followed by Odisha at 7.51 percent. With an inflation rate of 7.36 percent and 7.03 percent, Uttar Pradesh and Madhya Pradesh came fourth and fifth.

Inflation has been higher in village areas in most of these states, compared to that in their urban patches, with Uttarakhand and Gujarat making exceptions. In Chhattisgarh, for example, rural inflation last month was at significantly high of 9.70 percent as against 7.42 percent in urban areas of the state.

This is in line with the trend seen across the country, as the overall urban inflation trended lower at 5.62 percent last month, but rural inflation shot off to 6.68 percent.

None of the 22 major states in India, interestingly, clocked rates that touched or fell below the Reserve Bank of India’s medium-term target for consumer price index-based inflation of 4 percent. Delhi showed the least price pressure during the month at 4.01 percent, followed by West Bengal at 4.63 percent.

“A comparison reveals that the year-on-year changes have outpaced the year-to-date changes. For example, there are seven states, whose year-on year inflation has crossed more than 2 percent. This indicates that the momentum of food prices continued to climb,” Soumya Kanti Ghosh, group chief economic advisor at State Bank of India, pointed out in a report.

India’s rising inflation has largely been on account of an increase on the food side. Even in October, the print came in higher due to a 42.18 percent spike in cost of vegetables.