A day after the Reserve Bank of India (RBI) cut policy rates by 50 basis points, government data on Wednesday showed retail price inflation shot up to 9.47 per cent in March, compared with 8.83 per cent in the previous month, primarily due to the soaring rise in vegetable prices.
While urban areas saw a steep rise in inflation, 10.3 per cent from 9.45 per cent in February, in rural regions, consumer price index (CPI)-based inflation rose to 8.79 per cent from 8.36 per cent in the previous month.
Wholesale price index (WPI)-based inflation fell to 6.89 per cent in March from 6.95 per cent in February, though according to this index, food inflation rose to a five-month high of 9.94 per cent, compared with 6.07 per cent in February and deflation in January. Since the food basket has more weight in the CPI than in the WPI, overall inflation numbers showed a rise in the case of the retail price index.
Urban areas recorded double-digit inflation in at least six food and beverages categories, raising inflation in this segment from 7.17 per cent in February to 9.15 per cent. The prices of vegetables soared by 20.58 percentage points, from -4.27 per cent in February to 16.58 per cent in March. However, in rural areas, the rate of price rise in vegetables was only 6.52 per cent, against -4.83 per cent in February. The rate of price rise for vegetables across the country rose to 9.55 per cent, against 4.73 per cent the month earlier.
WPI-based inflation, too, saw the rate of price rise for vegetables zooming to 30.57 per cent from 1.52 per cent in February.
Edible oil and fats also recorded inflation, rising from 12.76 per cent in February to 14.20 per cent in March.
RBI had yesterday said even as WPI-based inflation had softened, inflation, as measured by the new CPI series, suggested price pressures at the retail level were still high. Upside risks to inflation persisted, RBI governor D Subbarao had said.
Based on an assessment of the domestic demand-supply balance, global trends in commodity prices and the likely demand scenario, RBI had estimated WPI-based inflation in March 2013 would stand at 6.5 per cent. In its annual monetary policy, the central bank had said rising wages in both rural and urban areas had contributed to inflation.
However, inflation in fuel and lighting fell to 11.8 per cent from 12.78 per cent in February. Clothing, bedding and footwear, too, saw a decline in inflation—from 13.22 per cent in February to 12.50 per cent in March. In urban areas, the category saw a sharp decline—from 14.01 per cent in February to 12.97 per cent.
