This has complicated the task for the Reserve Bank Of India (RBI) as pressure mounts on the central bank to deliver matching steps to complement the government's recent reforms measures aimed at trimming the fiscal deficit and boosting growth.

The government also revised up July inflation figure to 7.52% from 6.87% announced earlier, showed the data. Economists had predicted a 7.70% rise in inflation for September after the government raised diesel prices by around 12%, compared with the August inflation of 7.55%. Inflation had touched 10% in September last year.

Prime Minister's Economic Advisory Council chairman C Rangarajan conceded "circumstances are not too favourable" for a rate cut now, although he expected inflation to drop to 7% by the end of this fiscal.

"The increase in inflation in September is essentially due to the rise in the price of fuel, which was a conscious decision of the government. Going ahead, I would believe that the tendency for the inflation would be to fall... We could get to about 7% by March 2013. That also depends upon how food prices behave in between. Therefore, I would say that the tendency for inflation hereafter would be in the downward direction," he told a TV channel.

Analysts said the RBI would also take note of the next stage of cascading effect of last month's diesel price hike and also the potential impact of stimulus measures announced by the US Federal Reserve in September, which could keep upward pressure on key commodity prices. India is a major importer of many commodities, including crude oil, fertilisers, edible oil and pulses.

Weak monsoon rains initially and an expected drop in supplies of cereals, pulses, oilseeds and sugar have also added to fears of persisting inflation in 2012-13, adding to the worries of the central bank

However, analysts said core inflation (price rise in non-food manufactured items), a key input for monetary policy-making, remained unchanged at 5.56% in September from the previous month, keeping suspense alive over the RBI's policy move on easing firms' borrowing costs in its next policy review meeting on October 30.

Finance minister P Chidambaram on Saturday called on the central bank to take calibrated risks to boost the economy as a reciprocal measure to the government's steps. RBI governor D Subbarao had said earlier this month that inflation had to be brought down further, signalling the central bank may stick to a hawkish stance.

The latest data showed manufactured items, which have a 65% weightage in the inflation basket, went up 6.26% in September from 6.14% the previous month, led by a jump of 18.36% in sugar, 12.59% in cement and lime, 10.79% in edible oil and 9.76% in manufactured food products.

Fuel and power inflation shot up to 11.88% in September, mainly on a 8.94% rise in high-speed diesel prices from 0.36% the previous month, rising from a multi-month low of 5.98% in July.