CPI inflation back in single digit, at 9.3%

The 2013-14 financial year began with easing of price pressure as the consumer price index (CPI)-based inflation fell to a 13-month low of 9.39% in April against 10.39% in the previous month.

After four months, the CPI-based inflation came back to a single digit, official data showed today.

In both urban areas as well as rural parts, the inflation (base-2010) was in a single digit with the rate of price rise standing at 9.73% in the former and 9.16% in the latter. However, rural areas saw inflation coming down to 13-month low, and urban areas to five-month bottom.

Inflation in food and beverages still stood in double digits. But it moved down to 10.61% in April from 12.42% in March. Vegetables saw huge decline in the rate of price rise.

The food category has the highest weight of over 45% in CPI, and hence the downward pressure was seen in the overall inflation.

The food and beverages inflation stood at 10.94% in urban areas and 10.53% in rural areas.

Vegetables saw considerable decline in inflation. It fell to 5.43% in April from a whopping 12.16%. Urban areas saw inflation in these items coming down to 3.84% from 7.70%, while rural areas witnessed 7.70% against 14.01%.

However, analysts said it is too early to establish a trend in vegetables or overall food inflation. The period during the rainy season may again see spike in food inflation, they said.  

The often-cited example of protein based items exerting upward pressure on inflation by the Reserve Bank of India continued to be true, though the pressure came down a bit. Egg, fish and meat saw inflation falling to 13.60 from 14.36%. Pulses went down to 10.39% from 11.38%.

In fact, clothing bedding and foot ware was also in double digits at 10.22% against 10.64% in March. However, the category saw inflation falling to single digit at 9.79% in April in urban areas against 10.05% in March. In rural areas, the inflation in these items fell to 10.43%, against 11.03%.

Fuel and light remained in single digit and fell to 8.10% against 8.31%. In urban areas, the fall was steeper at 8.87% from 9.55%, while in rural areas it rather rose to 7.71%   from 7.57%.

With industrial growth recovering a bit in March at 2.5% growth against 0.5% in the previous month. If the trend of falling inflation and rising growth continues, some green shoots of recovery could be visible in the macro economy. However, economists said the recovery may be gradual and may pick up from the second half onwards.