Retail inflation eased to a three-month low of 6.77 percent in October. This is lower than the five-month high of 7.41 percent in September. According to the data released on Monday, this decline in the retail inflation rate is due to softening in the prices of food items. However, despite the decline, the retail inflation rate in the month of October is still above the RBI's target band of 2 to 6 percent. Inflation has been above this band every month of this year.

Explain that India's central bank Reserve Bank of India mainly considers retail inflation as the basis for formulating monetary policy. In such a situation, softening of prices is a positive sign for RBI. For some time now, RBI has been trying to stimulate the economy while fighting high inflation. The RBI has increased its key interest rate four times this year to 5.90 percent - the highest since April 2019. This lower price is in line with the assessment of RBI Governor Shaktikanta Das on Saturday, who had predicted that retail inflation could come down to 7 percent in October from 7.41 percent in September. 

Speaking at an event in New Delhi, the RBI governor had said that inflation is an important concern for India. He had said that the central bank and the government have taken several steps in the past months to effectively deal with it. Despite a decline in inflation, the RBI has failed to manage price increases under the flexible inflation targeting framework (2-6%) implemented in 2016. CPI-based inflation has remained above the 2-6 per cent range for three consecutive quarters.

On November 3, the Monetary Policy Committee (MPC) of the RBI held a meeting on its failure to control inflation for the first time since the monetary policy framework came into effect almost six years ago. The report to be given to the government was discussed in this meeting. Under RBI rules, the central bank has to answer for its failure to keep inflation under control. At the same time, according to Morgan Stanley, India's retail inflation may fall within the target band of RBI by March 2023. 

Let us tell you that according to the data released by the government on Monday itself, the wholesale price inflation also came down to 8.39 percent in the month of October. It was 10.7 percent in September. Wholesale inflation in the country has come down to double digit mark for the first time since March 2021. At that time the wholesale inflation rate was 7.89 percent. In such a situation, after 19 months, the figure of wholesale inflation has come in single digits.