India’s retail inflation inched up to 4.48 per cent in the demand-driven festive month of October from 4.35 per cent in September, reversing the four-month downward trend.
Urban areas bore the brunt of the rise in inflation, surging to 5.04 per cent from 4.57 per cent.
In its latest monthly review, the department of economic affairs under the finance ministry had sounded a note of caution on core inflation, saying it remained sticky.
Sabnavis said that within the miscellaneous category, personal care products and household goods would also witness higher inflation as most producers had announced that they would be increasing prices to offset the increase in costs.
Even as the inflation rate in health declined to 7.57 per cent from 7.74, economists cautioned that inflation in this sector was becoming structural.
Govinda Rao, former director at the National Institute of Public Finance and Policy , said the RBI had to closely monitor the growth–inflation dynamics.
However, the rate fell to 0.31 per cent in villages from 0.69 per cent, while it rose to 1.72 per cent from 0.68 per cent during this period.
Fuel and light inflation surged to 14.35 per cent in October from 13.63 per cent in the previous month.
“Our calculations suggest that the direct impact of the reduction in central excise duty on petrol and diesel on the November inflation print would be 30-35 basis points, with a somewhat smaller impact of the varied VAT cuts by states.
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