The rate of price rise in the food basket accelerated to 4.94 per cent in March, as against 3.87 per cent in the preceding month.
Inflation in ‘fuel and light’ category was 4.50 per cent during the month as against 3.53 per cent in February.
Earlier this month, the Reserve Bank of India (RBI) had projected the retail inflation at 5 per cent in the January-March quarter of 2020-21 and 5.2 per cent in the first two quarters of the current fiscal.
“The numbers are slightly higher than expected. While food inflation remains high, non-food side inflation is a concern. Transport and communication is pushing the numbers high. Simultaneously, we have seen weaker-than-expected industrial production numbers,” Sujan Hajra, chief economist, Anand Rathi Securities, Mumbai, told news agency Reuters.
“The CPI inflation for March that came exactly in line with our estimates reflects the bottoming-out of food prices and continued stickiness in core inflation. Over the next one quarter, we expect the headline print to average 5.3 per cent despite supportive base effect,” Garima Kapoor, economist, Institutional Equities, Elara Capital, Mumbai, told Reuters.
The RBI mainly factors in the retail inflation while arriving at its bi-monthly monetary policy.
The RBI’s monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on consumer price index (CPI) at 4 per cent (+,-2 per cent).
Another set of government data released showed that India’s industrial output contracted 3.6 per cent in February from a year earlier.
(With inputs from agencies)