Rising for the third consecutive month, retail inflation breached the double-digit mark at 10.56% in December, driven by higher prices of vegetables, edible oil, pulses and cereal.
The retail inflation was 9.90% in November and 9.75% in October.
The vegetables basket in December recorded the highest inflation of 25.71% among all the constituents that make the Consumer Price Index (CPI), according to data released today.
Vegetables were followed by the oil and fats segment at 16.73%. Sugar turned more expensive by 13.55%.
Pulses and cereals became dearer by 13.46% and 13.70% on an annual basis. Meat, fish and egg rose become 11.64% more expensive.
Clothing and footwear witnessed 10.74% increase in prices.
In urban areas, retail inflation rose to 10.42% in December from 9.69% in the previous month. The CPI for rural population increased to 10.74% during the month from 9.97% in November.
All India provisional General (all groups) CPI numbers of December 2012, for rural, urban and combined are 126.8, 124 and 125.6, respectively.
The Reserve Bank of India (RBI) is expected to take into account the double-digit retail inflation when it comes out with its third-quarter policy review later this month.
Wholesale price based inflation for November was at 7.24%, much higher than the RBI comfort level of 5-6%.
Concerned over the persistent inflation, the RBI has kept key interest rates unchanged since April, 2012.
Industrial output growth rate had contracted by 0.1%in November, from a robust 8.3% in October.