Wholesale inflation cools to 5.7% even as food prices heat up
Inflation based on the wholesale price index slipped to 5.7% in March as manufactured goods showed cost decline even as food prices hardened.
The WPI inflation, reflecting the annual rate of price rise, in February was 6.55%. In March 2016, the print came in at (-) 0.45%.
According to official data released today, food prices saw a sharp rise of 3.12% in March compared to 2.69% in the previous month.
This is primarily because of a steep price jump in vegetables where inflation stood at 5.7%. As for fruits, the figure was also high at 7.62%, while for egg, meat and fish, it was 3.12%.
Fuel inflation declined to 18.16%, from 21.02% in February.
The manufactured items witnessed some softening in price rise, with inflation at 2.99% in March, as against 3.66% in the previous month.
The government also revised upwards January inflation to 5.53% from the provisional estimate of 5.25%.
Earlier this month, the Reserve Bank of India (RBI) had left key policy rate unchanged at 6.25% for the third review in a row citing upside risks to inflation. It had, however, increased the reverse repo rate -- which it pays to banks for parking funds with it - by 0.25% to 6%, narrowing the policy rate corridor.
For 2017-18, it projected retail inflation to average 4.5% in the first half and 5% in the second half.
Data released last week showed that retail inflation touched a five-month high of 3.81% in March on costlier food items and non-food products like fuel and light.
RBI frames its monetary policy stance on the basis of retail inflation.