New Delhi: India’s retail inflation in March rose to a four-month high of 5.52 per cent due to a surge in food and fuel prices. Rising retail cost was a major factor in the RBI’s recent decision to keep the repo rate on hold, as low lending rates can potentially stroke inflation.Also Read - Flight Tickets To Get Costlier As Jet Fuel Price Surges To Record High; Check Latest Rates Here
According to the data furnished by the National Statistical Office (NSO), CPI Urban rose 0.26 per cent in March, whereas the CPI Rural remained static. Meanwhile, the Consumer Food Price Index soared to 4.94 per cent in March from 3.87 per cent in February. Also Read - India’s Retail Inflation Surges To 8-Year Record High Of 7.79% In April as Food, Fuel Prices Spike
The Reserve Bank of India (RBI), which mainly factors in the retail inflation while arriving at its monetary policy, has been asked to keep CPI inflation at 4 per cent with a margin of 2 per cent on either side. Also Read - Your Bills at Restaurants To Increase Soon As High Inflation Pushing Raw Material Prices Up
The highest year-on-year increase in retail prices was witnessed in the ‘oil and fats’ segment, showing an increase of 24.92 per cent during the month.
What became expensive and what became cheaper:
In the food department, pulses, meat, fish and fruits were among the affected categories, while cereal, vegetable and egg prices have dipped.
Inflation in case of ‘pulses and products’ was 13.25 per cent, up from 12.54 per cent, the NSO data showed. Likewise, ‘meat and fish’ prices rose 15.09 per cent, eggs became dearer by 10.60 per cent. Fruit prices rose to 7.86 per cent and the overall price of food and beverages category was up 5.24 per cent.
However, ‘cereals and products’ turned cheaper further with a negative print at (-)0.69 per cent as against (-) 0.35 per cent. In the vegetable basket too, the CPI remained in negative territory at (-) 4.83 per cent.
Meanwhile, fuel prices increased, along with transport and communications cost.
Inflation in ‘fuel and light’ increased to 4.5 per cent in March this year from 3.53 per cent a month ago. Transport and communication costs spiked by 12.55 per cent in March, while healthcare costs were up by 6.17 per cent, showed the data.
Earlier this month, the RBI had projected the retail inflation at 5 per cent in January-March quarter of 2020-21 and 5.2 per cent in the first two quarters of the current fiscal.
After breaching the upper tolerance threshold of 6 per cent for six consecutive months (June-November 2020), CPI inflation fell in December 2020 and eased further in January 2021 to 4.1 per cent on the back of a sharp correction in vegetable prices and softening of cereal prices. However, it rebounded to 5.03 per cent in February, driven primarily by base effects.