Prices of almost all everyday products and services — from food to footwear and movie tickets to medicines — saw a sharp rise in October, pushing retail inflation to 10.09%, the highest in seven months.
Costlier onions and tomatoes saw retail inflation — a measure of prices that are asked of you at a shop — cross the double-digit mark for the first time in seven months, indicating Indians are paying some of the highest prices in recent times for virtually everything.
Factory output, on the other hand, grew 2% in September, from 0.4% in August, but experts cautioned that it may be too early to conclude this as the beginning of industrial recovery.
Rising prices and sliding growth remain key worries for the government strung in a by a heavy debt burden.
“CPI (consumer price index) at over 10% is a disturbing sign. Growth in CPI is due to a rise in food inflation,” C Rangarajan, chairman of Prime Minister’s economic advisory council, said.
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High prices, as shown by data on Tuesday, also signal India’s inability to control household inflation, partly stoked by a falling rupee.It could get worse with the rupee falling to a two-month low to Rs 63.17 to a dollar on Tuesday amid fears that the US will begin unwinding its easy-money policy that will prompt foreign funds to move dollars away from emerging markets such as India.
“But Besides, home loans could get costlier and home budgets could get squeezed further as the Reserve Bank of India (RBI) could announce another round of interest rate hike next month to tame galloping inflation.
India’s overall CPI-based inflation rose 10.09% in October, up from 9.84% in September. In cities, it was even higher at 10.20%, compared to 10.11% in rural India.
The devil of the fresh price indices lay in the detail. Compared to October 2012, vegetable prices went up 45.67%, while fruits prices rose 12.84%.
Read More: Factory output crawls at 2% in September
Overall food prices rose 12.56% in October compared to the same month last year. Prepared meals’ prices -– a proxy for restaurant rates -– rose 9.1%, primarily because of soaring vegetable prices and high rents.
Even personal care is getting expensive -- deodorants and lipstick prices are up 6% when compared to last October.
Basket full of sorrow