New Delhi: India’s retail inflation climbed to 6.09 per cent in October, crossing the Reserve Bank of India’s upper tolerance limit of 6 per cent for the first time in two years. The increase is raising concerns that households could face higher expenses across groceries, transport, clothing, restaurants and everyday services.
Inflation had stood at 5.54 per cent in September, while food inflation accelerated from 7.74 per cent to 8.94 per cent in October. However, the pressure is no longer restricted to food items. As many as 19 of the 43 Consumer Price Index sub-groups recorded inflation of at least 4 per cent, compared with 14 in the previous month.
Onions cost more than twice as much as they did a year earlier, while garlic inflation crossed 60 per cent. Ginger and lemon also remained expensive. Rural inflation reached 6.63 per cent, compared with 5.41 per cent in urban areas, highlighting the greater pressure on households with limited spending flexibility.
Rising prices are also affecting services and other consumer categories. Eating out, personal care, transport and buying clothes could become more expensive. However, inflation remains uneven, with housing inflation at 2.90 per cent and healthcare inflation at 2.05 per cent.
The breach presents a challenge for the RBI, which targets inflation at 4 per cent within a tolerance range of 2 to 6 per cent. The central bank faces a difficult decision ahead of its December policy review, with another interest rate increase becoming a possibility.
Higher interest rates could make home loans, personal loans and business borrowing more expensive. While tighter monetary policy can help control demand and inflation expectations, it cannot directly address supply shortages or rising agricultural prices.
If inflation remains above 6 per cent for several months, household budgets could face sustained pressure. Weather disruptions, food supply constraints and higher input costs remain key risks. The RBI’s immediate challenge will be to bring inflation back within its target range without slowing economic growth.
