India’s August CPI hits 4.82% as wholesale inflation nears 10%

India's consumer price inflation rose to 4.82 percent in August from 4.45 percent in July, the statistics ministry said on 14 September. It is the highest reading since the new CPI series, with a 2024 base year, began in January, and a 20-month high on a comparable basis. A Reuters poll had expected 4.80 percent. A CNBC-TV18 poll had expected 4.17 percent.

The all-India CPI index stood at 108.74 against 107.95 in July. Rural inflation was 5.23 percent, up from 4.84. Urban inflation was 4.31 percent, up from 3.96. Food inflation, measured by the Consumer Food Price Index, rose to 5.95 percent from 5.52 percent. Rural food inflation was 6.13 percent. Urban food inflation was 5.64 percent.

Core CPI, which strips food and fuel, rose to 4.2 percent from 3.9 percent. Housing inflation increased to 2.61 percent from 2.22. Clothing and footwear rose to 3.56 percent from 3.38. Restaurant and accommodation services rose to 8.38 percent from 7.72. Information and communication jumped to 2.01 percent from 0.63 percent.

Wholesale prices are a different story

The commerce ministry printed wholesale price inflation at 9.92 percent in August, up from 9.78 percent in July, on a 2022-23 base. Fuel and power in the WPI basket rose to 22.93 percent from 20.05 percent. Wholesale food inflation rose to 7.05 percent from 6.65 percent. Primary articles eased to 7.76 percent from 8.52 percent. The ministry listed mineral oils, food articles, manufactured foods, basic metals, non-food articles and chemicals as the main upward drivers.

That split is the policy problem. Retail inflation is still inside the Reserve Bank's 2 to 6 percent band, though it has now sat above the 4 percent midpoint for a third month. Wholesale inflation is close to double digits and is being pulled by fuel that retail indices only partly capture in the same month. Brickwork Ratings' Rajeev Sharan said the risk is that high wholesale food and input costs eventually pass through, alongside any further move in crude.

The RBI's Monetary Policy Committee cut its inflation projection in August to 5.0 percent from 5.1 percent and still flagged a below-normal monsoon, El Niño, and energy prices tied to the West Asia war. The committee meets again next month. A 4.82 percent print does not force a hike on its own. A WPI reading that stays near 10 percent, plus diesel at elevated levels after the Saudi pipeline outage, gives members who want a hike a thicker file.

What the food number is made of

BusinessLine and other desks tied the food rise to weak monsoon patches and higher prices for staples such as onion, garlic and ginger. Those are small weights individually and large politically. Rural households meet them every week. That is why rural headline inflation is running almost a full point above urban.

The new CPI series makes August-to-August history awkward. Officials and banks will keep saying "20-month high" until the new series has a longer track. The operational comparison for the RBI is July-to-August on the same series, and that comparison is up.

For households the relevant figures are simpler. Food at 5.95 percent. Rural food at 6.13 percent. Wholesale fuel and power at 22.93 percent. Those three numbers, not the midpoint debate, are what show up at the mandi and the pump.