The Retail Inflation for November has surged to 4.88%, breaching the 4% target set by the Reserve Bank of India, from 3.58% in the previous month, government data showed on Tuesday. Meanwhile, Industrial production growth also slowed to 2.2% in October as compared to 4.2% a year ago.
On December 6, given the concern over rising inflation, the central bank kept the repo rate unchanged at 6%, and stance neutral, saying that its decision will depend on data.
The rural inflation also rose to 4.79% from 3.36% in October, while the urban inflation at 4.9% rose to 4.9% from 3.81% in October. According to economists, rising commodity prices globally and a new pay revision for government employees may have led to the rise in inflation. November’s heavy rains “created lots of damage” for perishable fruit and vegetable crops, said Rupa Rege Nitsure, group chief economist at Larsen & Toubro. “We have seen that translated into price rises for onions, tomatoes and other perishable commodities”.