Inflation inches towards double digit at 9.75% in October

Inflation inches towards double digit at 9.75% in October New Delhi: Driven by rising prices of food items such as sugar, pulses and vegetables as well as clothings, retail inflation moved closer to the double digit mark at 9.75 percent in October.

It was 9.73 percent in the previous month, according to the Consumer Price Index (CPI) data released Monday.

The highest rise in prices during the month was recorded by sugar, up 19.61 percent, year-on-year basis. It was followed by edible oil which turned expensive by 17.92 percent, while pulses were dearer by 14.89 percent on the annual basis.

Vegetable rates during month increased by 10.74 percent, while meat and fish and egg rates rose by 12.18 percent.

At the same time, clothing and footwear also witnessed an increase in prices at 10.47 percent on an annual basis.

In urban areas, retail inflation moderated to 9.46 percent in October, compared to 9.72 percent in the previous month. However, CPI rose for rural population to 9.98 percent during the month from 9.79 percent in the previous month.

"All India provisional General (all groups) CPI numbers of October 2012 for rural, urban and combined are 126.7, 122.6 and 124.9 respectively," said Minister of State for Statistics and Programme Implementation (Independent charge) Srikant Kumar Jena.

Concerned over the persistent inflation, the Reserve Bank last month kept its benchmark interest rate unchanged.

However, RBI had reduced cash reserve ratio by 0.25 percent to infuse additional liquidity, injecting Rs 17,500 crore into the financial system.

Accordingly, the CRR or the portion of deposits banks have to park with the RBI now stands at 4.25 percent, while the repo rate, at which RBI lends to the system, has been retained at 8 percent.

The reverse repo, at which RBI absorbs excess liquidity through borrowings from banks, remains at 7 percent.

Meanwhile, industrial growth has slipped in the negative territory at 0.4 percent in September, compared to a growth of 2.5 percent in the same month last year, which indicates persistent sluggishness in the economy.

PTI