New Delhi: The increased prices of potatoes, onions, tomatoes and green vegetables pushed the retail inflation rate of September to the highest level in nine months. According to government data released on Monday, the retail inflation rate of September was 5.49 percent while the inflation rate of August this year was 3.14 percent. In September, the retail inflation rate was also supported by the prices of pulses along with vegetables and fruits.

For the last one and a half month, the price of potato and onion has been hovering between 50-70 rupees per kilogram, while the retail price of tomato was 60-80 rupees per kilogram last month, which has now crossed 100 rupees per kilogram. 

Will interest rates not be reduced?

Due to the prices of potatoes, onions and tomatoes not coming down, the retail inflation rate of October may also remain above five percent like September. The result of this will be that RBI will not be in a position to cut interest rates in the coming December also. Due to the inflation rate being below five percent for the last several months, last week RBI had indicated to cut interest rates in December.

There is no reduction in food inflation

According to the data released on Monday, the inflation rate of food items rose to 9.4 percent in September, while this rate was 5.66 percent in August this year. In September, the retail inflation rate of total vegetables including potatoes, onions, tomatoes etc. increased by 36 percent compared to September last year. The price of pulses increased by 10 percent and that of fruits by 7.65 percent. The retail price of spices fell by 1.39 percent in September.

Higher inflation in less developed states

According to government data, retail inflation rate is higher than the national average in less developed states. Bihar had the highest retail inflation rate of 7.5 percent while retail inflation rate in Delhi was 3.67 percent. In September, retail inflation rate was 6.74 percent in Uttar Pradesh, 7.36 percent in Chhattisgarh, 6.20 percent in Himachal Pradesh, 5.94 percent in Madhya Pradesh, 6.56 percent in Orissa.