Inflation accelerates again in November despite fuel tax brakes

The fuel tax cuts helped douse the transport and communications inflation by 0.6% on a month-on-month basis

India’s retail inflation hardened for the second month in a row in November touching 4.91% from 4.48% recorded in October, with urban parts of the country experiencing a sharper rise in prices at a pace of 5.54% and vegetable prices jumping 7.45% from the previous month.

Transport and communication inflation eased only marginally to 10.02% in November, from 10.9% in the previous month, despite tax cuts on petrol and diesel announced by the Centre in the first week of the month, followed by most States paring their own fuel duties in subsequent weeks.

This suggests that upward price pressures persist, owing to the rise in input and commodity costs, as reflected in the wholesale price inflation touching a five-month high of 12.54% in October. November’s wholesale price trends are due to be released this Wednesday.