Retail inflation spikes to 6.3% in May due to escalating food and fuel prices

Retail inflation spiked to 6.3 per cent in May due to escalating food and fuel prices, government data showed on Monday. It did so after easing to 4.23 per cent in April. What is worrisome is that food inflation jumped to 5.01 per cent in May, as against 1.96 per cent in the previous month.

Inflation in fuel and light category was elevated at 11.58 per cent during the month, said a statement issued by the Ministry of Statistics and Programme Implementation. The government has asked the Reserve Bank to keep the retail inflation at 4 per cent with a margin of 2 per cent on either side. It has breached the Reserve Bank of India’s band for the first time in five months. The RBI, which mainly factors in retail inflation while arriving at its monetary policy, had left the key interest rate unchange earlier this month. The central bank has projected the CPI inflation at 5.1 per cent during 2021-22 -- 5.2 per cent in Q1; 5.4 per cent in Q2; 4.7 per cent in Q3; and 5.3 per cent in Q4 of 2021-22, with risks broadly balanced.

Experts have expressed concern about higher inflation and the second wave of the Covid-19 pandemic, which has severely impacted lower and middle income families.

Several reports have highlighted how prices of several commodities have been rising for the past few months.

Perrol is retailing at over Rs 100 per litre mark in seven states and union territories -- Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka and Ladakh.

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Free Press Journal