Inflation rises to 8.62 percent in September

NEW DELHI - The wholesale price inflation rose to 8.62 percent in September from 8.51 percent in the previous month, increasing pressure on the Reserve Bank of India (RBI) to further tighten the monetary policy.

A sharp jump in food prices and increase in the prices of most manufactured products continue to push inflation upward despite the central bank’s recent tightening of monetary policy.

The RBI has raised interest rates five times so far this year. The September inflation data may force the RBI to raise interest rates further in the Nov 2 monetary policy announcement.

The RBI hiked its short-term borrowing and lending rates by 50 basis points and 25 basis points respectively last month.

The primary articles index, which has 20.12 percent weightage in the benchmark wholesale price index, increased 1.5 percent to 179.7 in September from 177 percent in the previous month, according to data released by the commerce ministry Friday.

Prices of most commodities in the primary index segment- food as well as non-food articles- rose in the reporting month. A sharp jump was recorded in the prices of fish, fruits and vegetables, raw silk and cotton.

The index of manufactured products, which has nearly 65 percent weight in the wholesale price index, rose 0.3 percent to 127.6 in September from 127.2 in the previous month.

The July inflation has been revised upward to 10.31 percent from the estimated 9.97 percent announced earlier.

For the month of July the final wholesale price index for all commodities (base:1993-94=100) stood at 263.8 as compared to 263.3 (provisional) and annual rate of inflation based on final index stood at 10.31 percent as compared to 9.97 percent (provisional) reported earlier, an official statement said.

Data released Friday also showed the annual food inflation accelerated to 16.37 percent for the week ended Oct 2 compared to 16.24 percent in the previous week.