Surge in Retail Inflation Breaks RBI's Upper Tolerance Barrier

Retail inflation in India climbed to 6.21% in October from 5.49% in September, primarily due to escalating food prices. This increase surpasses the Reserve Bank of India's upper tolerance level as detailed in the National Statistics Office report. The RBI has maintained the key short-term lending rate this month.

Retail inflation in India witnessed a significant rise to 6.21% in October, up from 5.49% in the previous month, according to official data released on Tuesday. The increase is mainly attributed to a surge in food prices, which has driven the inflation rate beyond the Reserve Bank of India's (RBI) upper tolerance mark.

Data from the National Statistics Office indicated that inflation in the food basket jumped to 10.87% in October, compared to 9.24% in September and 6.61% in the same month last year. This upward trend in food costs has become a key factor in the overall inflation surge.

The RBI, maintaining the key short-term lending rate earlier this month, has a standing directive from the government to keep inflation at 4%, with a permissible deviation of 2% on either side. However, the recent inflation figures pose challenges to this mandate.

(With inputs from agencies.)