Consumer Price Index up 0.97% in Oct, food and clothing dearer

Consumer Price Index up 0.97% in Oct, food and clothing dearer

The CPI based on retail prices stood at 113.1 points in September, as per data released by the government today.

However, actual inflation on the basis of the CPI figures can only be calculated from January, 2012, once the data -- which was compiled for the first time at the start of this year -- has stabilised.

At the all-India level, the CPI for 'food, beverages and tobacco' went up by 1.06 per cent to 114.4 points in October from 113.2 points in the previous month.

The main increase was seen in the prices of vegetables, with the index rising by 2.98 per cent month-on-month to 120.8 points, while the index for milk and milk products went up by 1.52 per cent to 120.4 points.

In a similar fashion, the index for pulses went up by 1.70 per cent to 101.8 points. In October, the CPI for 'clothing, bedding and footwear' stood at 121 points on an all-India basis, as against 119.4 points in September, an increase of 1.34 per cent.

In addition, prices in the 'fuel and light' segment rose by 0.93 per cent in October vis-a-vis the previous month, with the index inching up to 119.2 points from 118.1 points in September.

The index for 'Housing' was also up 1.10 per cent month-on-month at 110 points in October in comparison to 108.8 points in September.

This is the fifth month that housing prices have been factored into the CPI data. However, the data was compiled only for urban areas.

The government had earlier said that "house rent is negligible for the rural areas" and as such, only urban areas have been taken into account for the index on housing.

The price of miscellaneous items rose by 0.54 per cent in October vis-a-vis September, as per the CPI data, with the index for this segment rising to 112.1 points on a countrywide basis in the month under review from 111.5 points in the previous month.

In the official release, the Ministry of Statistics and Programme Implementation (MOSPI) also said that real inflation rate, as calculated on the basis of the CPI data, would be available from January next year.

"Annual inflation rates would be available at the time of release of indices for January, 2012, when the indices for one year are available," the ministry said.

Experts also said the index cannot be used yet as a measurement of retail inflation.
"The trend has to be observed for some more time. It needs time to stabilise," Crisil Chief Economist D K Joshi said.

Joshi also said calculation of retail price inflation on the basis of the CPI data can take place next year.

"The government began releasing the nationwide CPI from January this year. It will be only from 2012 that they will be able to calculate the exact retail inflation numbers, as the data needs one full year before it stabilises," he said.

As per the latest data, the general indices for rural and urban consumers stood at 115.8 points and 112 points, respectively, in October.

In September, they were recorded at 114.6 points and 111.1 points, respectively, for rural and urban consumers.

Meanwhile, the overall August CPI reading has been maintained at the provisional estimate of 111.7 points.

The new nationwide CPI launched earlier this year was introduced to reflect the actual movement of prices at the micro-level and help policymakers like the RBI in better framing of decisions.

With the passage of time, the government expects it to supersede the Wholesale Price Index (WPI) as the benchmark for measurement of inflation.

Inflation, as measured by the WPI, stood at 9.73 per cent in October.

At the time of unveiling the new CPI earlier this year, the government had said it would continue the practice of giving the figures in the present form without quoting the inflation rate for one year.

These consumer indices include five major groups -- food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous items.