The retail inflation eased marginally to 3.15 percent in July on the back of softening fuel and light prices even as overall food prices moved up, showed government data on Tuesday, leaving room for the Reserve Bank to go for another round of rate cut in October.
Retail inflation was 3.18 percent in June 2019, while it stood at 4.17 percent in the year-ago period (July 2018).
The overall food inflation, measured on Consumer Food Price Index (CFPI), moved up to 2.36 percent during July from the revised 2.25 percent print for June 2019, as per data released by the Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation.
While lowering the key interest rate for the fourth time in a row earlier this month, the RBI had maintained its "accommodative" stance that meant an increase is off the table.
The central bank, which had reduced the rate unconventionally by 35 basis points this month, mainly factors in retail inflation in its bi-monthly monetary policy.
The CSO data showed that the rate of price rise in vegetables softened to 2.82 percent during the latest month as against a rise of 4.66 percent in June, while prices of 'pulses and products' went up to 6.82 percent from 5.68 percent.
In case of fruits, the price trend showed upside movement with an inflation print of (-) 0.86 percent as against (-) 4.18 percent a month earlier.
Prices of protein-rich 'meat and fish' rose at nearly the same level at 9.05 percent (from 9.01 percent in June), however, inflation in eggs eased to 0.57 percent (against 1.62 percent).
In the fuel and light category, deflation was witnessed with a print at 0.36 percent, as against a rise of 2.32 percent a month ago.
As per the latest sowing data maintained by the Union Agriculture Ministry, total acreage sown to all Kharif crops so far has remained lower at 869.55 lakh hectare as against 918.70 lakh hectare in the year-ago period.
Agriculture Secretary Sanjay Agrawal on Friday said that the deficit in overall sowing area has improved compared to the previous week and the gap has come down.
Currently, the retail inflation is well below the RBI's comfort level. The government has asked the central bank to keep inflation in the range of 4 percent.