Despite unseasonal rains, renewing industry clamour for further cut in Reserve Bank’s policy rate to boost growth, retail inflation eased to 3-mth low of 5.17 per cent in March from 5.37 per cent in February. The food prices, mainly milk and vegetables, brought down the inflation on the whole.
Inflation also declined for cereals and its products, although it was up in the case of protein-rich items like meat and fish, said the Government data released on Monday. The retail inflation as measured by Consumer Price Index (CPI) was 5.37 per cent in February, and 5.19 per cent in January. It was 8.25 per cent in March last year.
After cutting rates twice this year, the RBI had kept the key policy rate unchanged on fears of unseasonal rains impacting food prices. Industry body CII’s Director General Chandrajit Banerjee said inflation continues to remain moderate and has in fact declined when compared to the previous month.
“This should persuade the RBI to resume its rate easing cycle to support growth without being too concerned about the impact on inflation,” Banerjee said. The easing prices of milk, vegetables and fruits brought down the overall food inflation to 6.14 per cent in March, from 6.79 per cent recorded in February.
The rate of price rise in the food and beverages segment as a whole was 6.2 per cent in March, lower than 6.76 per cent in the previous month. The CPI-based retail inflation has been calculated with a new base year of 2012. Inflation in the fuel and light segment was 5.07 per cent last month, up from 4.72 per cent in February.
“In the housing segment, inflation was 4.77 per cent last month, as compared to 4.98 per cent,” the data said. For the rural segment, the data showed, the overall retail inflation was 5.58 per cent in March and 4.75 per cent for urban centres.
To calculate the CPI, price data are collected from selected towns by the field operations division of NSSO and from selected villages by the Department of Posts.