![]() The Union government’s move to cut petrol prices by Rs 5 a litre and diesel prices by Rs 10 a litre from November 4, and a cut in value added tax by several state governments, had softened inflation in these items. Inflation had a high base of 6.93 per cent in November last year. ICRA Chief Economist Aditi Nayar said, “With input price pressures forcing producers to raise prices in many sectors, the November inflation accelerated slightly faster than we had expected, shrugging off the favourable base effect and the cut in fuel taxes.” Though the consumer price index (CPI)-based inflation rate has not reached alarming levels yet, staying well within the Reserve Bank of India’s (RBI’s) target range of 2-6 per cent for the fifth straight month in November, experts cautioned that it could rise further, particularly in services, when demand improves. ![]() Besides this, a surge in input prices prompted companies to increase prices of their products and services as demand strengthened. This was primarily because of a rise in food inflation to 1.87 per cent from 0.85 per cent over this period, even as prices of vegetables, except for some items such as tomatoes, continued to fall. India’s retail inflation rate rose to a three-month high of 4.91 per cent in November from 4.48 per cent in the previous month, despite the Centre and states reducing taxes on petrol and diesel. ![]()
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