India s overall inflation drops to 5-year low of 2.38 in September RBI

India-s overall inflation, measured by the Wholesale Price Index (WPI), dropped to 5-year low of 2.38% in September compared to 3.74% in August. This is much lower inflation number compared to expectations. Overall inflation stood at 7.05% in September last year.

The Food Price Index for September dropped steeply to 3.52% in September compared to 5.15% in August. The fuel and power inflation also dropped to 1.33% in September from 4.54% in August and the primary articles inflation dropped to 2.18% in the same month from 3.89% in August. Also the Consumer inflation dropped to 6.46% in September from 7.8% in August due to the steep decline in vegetables prices.

With this drop in overall inflation and consumer inflation, RBI may cut interest rates now in order to boost both economic and industrial growth.