The Consumer Price Index — a key measure of inflation — was reported at 6.71 percent for July. It was a slight drop compared to the 7.01 percent reported the previous month, but considerably higher than the 5.59 percent reported in April 2022.
The consumer price index (CPI) in the rural areas stood at 6.8 percent, and 6.49 percent in urban areas. This was largely due to a reduction in the prices of key commodities, experts said.
The National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), collected the data from selected 1,114 urban markets and 1,181 villages across the country on a weekly basis.
In June, CNBC-TV18 had reported that India's retail inflation eased marginally to 7.01 percent, over and above the Reserve Bank of India’s (RBI) threshold of 6 percent. Inflation in the food basket in June 2022 was 7.75 percent, compared to 7.97 percent in the preceding month, as per the National Statistical Office (NSO) data.
According to the data, the food and beverages basket stood at 6.71 percent, while clothing and footwear was at 9.91 percent. Fuel and light accounted for 5.91 percent, according to the data.Assam reported the highest inflation, at 7.91 percent, while Gujarat (7.85 percent) and Haryana (7.83 percent) were not far behind.
Last week, in its attempt to curb inflation, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) decided to increase the repo rate by 50 basis points (bps) to 5.40 percent. The decision, announced by Governor Shaktikanta Das, was taken in committees in its bi-monthly policy meeting.
Rupa Rege Nitsure, Chief Economist, L&T Financial Services, said she feels the credit for the drop in inflation must go to India's policymakers as they reduced taxes on edible oils and fuels in a very timely fashion. "So, despite the fact that in July we have had so much disruption in vegetable and fruit supplies because of heavy rains, sequentially inflation easing like this is definitely a positive sign and this augurs well for overall consumption momentum," Nitsure said.
Indranil Pan, Chief Economist, Yes Bank, also felt this was a positive sign. "That said I think the policymakers need to be watchful of inflation. Yes, inflation has come down, but the pace of decline from here on could actually be slower than what we have been anticipated," he said.