India’s retail inflation in January has hit a seven-month high and breached the Reserve Bank of India’s upper tolerance band of 6%.

Inflation based on consumer price index (CPI) rose to 6.01% in January on an annual basis, mainly due to higher prices of certain food items, according to government data released on Monday. 

Retail inflation was 5.66% in December 2021 and 4.06% in January 2021.

As per the data released by the National Statistical Office (NSO), the inflation in the food basket was 5.43% in January 2022 compared to 4.05% a month ago.

The rise in the food basket was due to a sharp surge in prices of oils and fats, which climbed 18.70% year-on-year in January. Apart from this, the meat and fish prices saw a rise of 5.47% while that of vegetables gained 5.19% and pulses and products rose 3.02%.

Apart from food and beverages, the fuel and light segment climbed 9.32%, clothing and footwear rose 8.84% and the housing segment stood up 3.52%.

In a separate data released by commerce ministry, the wholesale inflation or WPI rose 12.96% in January.

In its recent bi-monthly monetary policy, the RBI has projected lower retail inflation of 4.5% in FY23 amid expectations of a normal monsoon this year and crude oil price not elevating beyond a level. The inflation forecast for 2021-22 is 5.3%.

The RBI has been tasked by the government to keep the inflation at 4%, within a band of plus or minus 2%.