New Delhi, 13 September (IANS). According to a latest report by SBI Research, inflation in August is unlikely to cut interest rates in October. In addition, if the first quarter growth rate and estimated data of the second quarter are taken into consideration, the interest rate cut in December is also somewhat difficult.
The report states that the GST rate on about 295 essential commodities has been reduced from 12 percent to 5 percent or zero, so the Consumer Price Index (CPI) inflation in this category can be reduced by 25–30 basis points in this category keeping 60 percent pass-through effect on food items.
In addition, rationalizing the GST rates of services may further reduce 40–45 basis points in CPI inflation on other items and services, as 50 percent will have a pass-through effect.
SBI Research said, “Overall, we believe that in FY 26-27, the Consumer Price Index (CPI) inflation may remain in the range of 65-75 base digits.”
India’s Consumer Price Index (CPI) inflation, which came down to 98 months low in July this year, reached 2.07 percent with a slight increase in August. This has been caused by an increase in inflation of food and beverages, which was negative for the last 2 months.
The prices of vegetables remained in a negative area, although in August, with a slight increase in August to -15.92 percent.
Prices of pulses declined by -14.53 percent, while spices also saw a decline in August. Fruit inflation has also come down to 11.65 percent, while the CPI of oil and fat increased to 21.24 percent.
India’s core inflation again increased to 4.16 percent. Both rural and urban consumer price index (CPI) inflation increased to 1.69 percent and 2.47 percent in August, compared to 1.18 percent and 2.10 percent respectively in July.
State -wise inflation data shows that out of 35 states and union territories, 26 inflation has been recorded less than 4 percent.
Only Kerala and Lakshadweep are the only one where inflation rate was more than 6 percent.
The report said that in India this season, sowing of kharif has been 2.5 percent more than the previous year, but due to torrential rains for several weeks, this benefit is at risk of ending. Between August and September 11, the entire country recorded about 8.7 percent rainfall.
-IANS
SKT/
