India retail inflation rose to 7.41% in September, highest since April

India's retail inflation accelerated to a five month high of 7.41% in September due to surging food prices, staying well above the Reserve Bank of India's (RBI) upper tolerance band for a ninth month, showed government data on Wednesday. India's CPI inflation was 7% in August.

Fueled by erratic rainfall and supply shocks from Russia's invasion of Ukraine, prices of daily consumables like cereals and vegetables, which form the largest category in the inflation basket, have climbed over the past two years, reports Business Standard. 

Separately, India's industrial growth contracted 0.8% in August from 2.4% in July and 13% a year ago, showed government data on Wednesday. A favourable base had kept the growth rate in double digits in May and June, but it fell sharply in July as the low base effect faded.

Industrial growth was 13% in August 2021 primarily due to a low base, as the factory output had contracted in the same month last year due to the first wave of Covid-19.

Already reeling from Covid-19 pandemic-induced economic shocks, India's poor and middle classes will be further hit by the increases as they spend a large chunk  of income on food.

The government has introduced measures to calm local prices, including some export restrictions on rice to temper inflation. But consumer prices have remained defiant and stayed above the RBI's upper tolerance limit this year.