Inflation soars to eight-month high of 7 percent

India's headline inflation based on wholesale prices jumped to 7 percent in October, the highest level in eight months, due to higher prices of fuel, food and manufactured goods, government data showed Thursday.

The country's main inflation measure based on the Wholesale Price Index (WPI) was at 6.46 percent in the previous month and 7.32 percent in the corresponding month of last year, according to data released by the ministry of commerce and industry here. 

Food prices jumped by 18.19 percent year-on-year during the month under review. It had increased by 18.4 percent in September. 

The headline for August is revised sharply upward at 6.99 percent from 6.1 percent reported earlier.Fuel and power inflation accelerated to 10.33 percent in October as compared to 10.08 percent in the previous month. 

Manufactured products inflation rose to 2.5 percent in the month under review from 2.03 percent reported in the previous month.Reacting on the monthly data, Assocham president Rana Kapoor said the rise in inflation is a “disturbing sign”. 

He said acceleration in build-up inflation indicates that there is pain ahead for the economy.Build-up inflation rate in the financial year so far was 6 percent as compared to a build-up rate of 4.66 percent in the corresponding period of the previous year. 

“The inflationary pressure is being exerted from the primary articles and food prices, which are in a way inexplicable given the fact that we had a good monsoon this year. By now, the impact should have been visible,” said Kapoor, who is also managing director of Yes Bank.

Prices of vegetables jumped by 78.38 percent in October year-on-year. Onion prices soared by 278.21 percent. Fruits became costlier by 15.94 percent. Prices of egg, meat and fish soared by 17.47 percent year-on-year during the month under review. 

Retail inflation based on the Consumer Price Index (CPI) rose to 10.09 percent in October as compared to 9.84 percent recorded in the previous month, according to data released by the Central Statistics Office (CSO) Tuesday.In retail markets prices of vegetables have soared by 45.67 percent.