India Inflation Breaches RBI's Limit. What Happens If It Remains Above 6%

India's inflation problem is no longer just about expensive vegetables, cooking essentials or the monthly grocery bill. Food remains the biggest reason prices are rising, but the latest data points to a more uncomfortable development: inflationary pressure is spreading across a much wider range of goods and services.Retail inflation climbed to 6.09 per cent in October, up from 5.54 per cent in September, breaching the Reserve Bank of India's upper tolerance limit of 6 per cent for the first time in two years. Food inflation accelerated to 8.94 per cent, making it the biggest contributor to the increase.But there is another number worth watching.

As many as 19 of the 43 consumer price index (CPI) sub-groups recorded inflation of at least 4 per cent. This suggests that the price problem is not confined to food alone. The October inflation reading is significant for two reasons:-First, it has moved outside the RBI's permitted inflation range.

The central bank targets inflation at 4 per cent, with a tolerance band of 2 per cent to 6 per cent.