Retail inflation declined to 4.35 per cent in September, mainly due to lower food prices, according to government data released on Tuesday.
The Consumer Price Index-based (CPI) inflation was at 5.30 per cent in August and at 7.27 per cent in September 2020.
As per the data released by the National Statistical Office (NSO), the inflation in food basket eased to 0.68 per cent in September 2021, significantly down from 3.11 per cent in the preceding month.
The Reserve Bank of India (RBI), which mainly factors in CPI-based inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep it at 4 per cent, with a tolerance band of 2 per cent on either side.
Last week, RBI Governor Shaktikanta Das had said that overall, the CPI headline momentum is moderating, which combined with favourable base effects in the coming months could bring about a substantial softening in inflation in the near term.
RBI has projected the CPI inflation at 5.3 per cent for 2021-22: 5.1 per cent in second quarter, 4.5 per cent in third; 5.8 per cent in last quarter of the fiscal, with risks broadly balanced.