New Delhi, Oct 15 (PTI): Inflation rose to its highest level this fiscal at 7.81 per cent in September as prices of wheat, cereals and diesel soared, a development that may prompt the Reserve Bank of India not to cut interest rates at its monetary policy later this month.
Inflation as measured by the Wholesale Price Index (WPI) was 7.55 per cent in August.
In September last year, however, it was 10 per cent.
In the food articles category, wheat turned expensive by 18.63 per cent. Cereals too became dearer by 14.18 per cent.
Inflation in diesel shot up to 8.94 per cent during the month, from 0.36 per cent, after the government allowed the state-owned oil companies to raise its price by over Rs 5 per litre on September 13.
The fuel and power category was up by 11.88 per cent, as, apart from diesel, aviation turbine fuel and kerosene became expensive.
Food inflation as a category declined to 7.86 per cent during the month, from 9.14 per cent in the previous month. Food articles have a 14.3 per cent share in the WPI basket.
Year-on-year basis, however, potatoes were costlier by 52.20 per cent and rice by 12.41 per cent.
In the manufactured items category, prices rose for cotton textiles, paper and paper products, rubber and plastic products.
The rate of price rise in the manufactured products was 6.26 per cent in September, as against 6.14 per cent in August.
The RBI is scheduled to unveil its policy on October 30. Industry has been demanding a rate cut in view of fiscal measures taken by the government, but the high level of inflation may dissuade RBI from easing the policy.
Inflation in eggs, meat and fish prices was 12.44 per cent, while in milk and fruits it was 6.25 per cent and 6.96 per cent respectively.
However, vegetables prices have eased. Inflation in this segment was 9.98 per cent in August.
In non-food articles, inflation in oil seeds was 28.13 per cent, fibres (-) 5.67 per cent and minerals 12.38 per cent.
Inflation for July was revised upwards to 7.52 per cent, from 6.87 per cent as per provisional estimates.
Before the September inflation number, as per the data released Monday, June had the highest rate of price rise in this fiscal at 7.58 per cent.