Assam's inflation index sees upward trend as nationwide rates climb

Assam's inflation index sees upward trend as nationwide rates climb

The state of Assam has not been spared from the inflationary spiral, with the inflation index climbing to 196.9 in September from 187.8 a year earlier.

India TodayNE
  • Oct 15, 2024,
  • Updated Oct 15, 2024, 11:19 AM IST

Retail inflation surged to a nine-month peak of 5.49 per cent in September, largely fueled by escalating food prices and a shift in the base effect from last year. This jump represents a sharp departure from the five-year low of 3.65 per cent observed in August, marking the first time inflation has surpassed the Reserve Bank of India’s (RBI) 4 per cent target since July. Analysts warn of significant risks to economic stability and the well-being of citizens as inflationary pressures mount.

The state of Assam has not been spared from the inflationary spiral, with the inflation index climbing to 196.9 in September from 187.8 a year earlier. The surge points to rising costs for goods and services, further straining household budgets. Economists attribute the broader uptick in inflation to a high base from the previous year, which initially helped keep inflation lower in July and August. However, as the base effect shifted, inflation pressures intensified in September, pushing the current rates upwards.

Despite the recent surge, inflation remains within the RBI’s tolerance range of 2-6 per cent. Yet, with food inflation—accounting for nearly half of the Consumer Price Index (CPI) basket—hitting 9.24 per cent in September from 5.66 per cent in August, concerns over affordability are growing. Rural inflation rose to 5.87 per cent, while urban inflation reached 5.05 per cent, further highlighting the impact on different demographics. A Reuters poll of economists had anticipated the inflation rise, with predictions ranging from 3.60 per cent to 5.40 per cent.

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Vegetable prices experienced a dramatic increase of 35.99 per cent in August, up from 10.71 per cent in July, driven by heavy rainfall that disrupted crop supply. Pulses saw a modest easing, with inflation slipping to 9.81 per cent from 13.6 per cent the previous month. Key commodities such as tomatoes and onions have been identified as primary drivers of the inflation spike. Dipanwita Mazumdar, an economist at the Bank of Baroda, noted that rising global prices for edible oils are adding further upward pressure.

Conversely, inflation for fuel and light contracted to -1.39 per cent, down from -5.31 per cent in August, while housing inflation edged up to 2.78 per cent from 2.66 per cent. Clothing and footwear prices saw modest increases, reaching 2.71 per cent in September.

During the Monetary Policy Committee’s (MPC) October meeting, the RBI maintained its retail inflation forecast at 4.5 per cent for the fiscal year 2024-25. Governor Shaktikanta Das emphasized the need for vigilant monitoring to keep inflation within the target range. He employed a metaphor of a "horse" to describe the central bank's approach, signaling a shift from previous analogies involving an "elephant" to highlight the proactive efforts needed to manage inflation.

"It has taken considerable effort to bring the inflation horse back to the stable, closer to our target compared to the elevated levels two years ago," Das remarked.

The central bank held interest rates steady but shifted its policy stance to 'neutral' from 'withdrawal of accommodation,' citing more clarity in the inflation outlook. Despite the RBI’s optimism, experts like Radhika Rao from DBS Bank cautioned that persistent price increases in certain food categories continue to pose challenges for India’s path to disinflation.


The MPC's future decisions will likely be guided by economic data, including GDP figures for the July-September period, ahead of the next policy review. There is optimism that a favorable monsoon finish will support a robust harvest, potentially stabilizing food prices by late 2024. Such developments could pave the way for a gradual easing of monetary policy as inflation pressures ease.

As India's inflationary trajectory remains under scrutiny, both policymakers and citizens are bracing for the economic implications that lie ahead.

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