Retail Inflation Shoots Up To 6.95 Per Cent In March Due To Higher Food, Fuel Prices

The Consumer Price Index-based inflation was 6.07 per cent in February. The inflation in the food basket was 7.68 per cent in March, up from 5.85 per cent in the preceding month

This is for the third straight month that the retail inflation remained above the RBI's comfort zone. Image: Getty

New Delhi: Retail inflation rate in India jumped to 6.95 per cent in March from 6.07 per cent a month ago, according to the government data released on Tuesday.

Mainly due to costlier food items, this reading remains above the Reserve Bank of India’s (RBI’s) tolerance limit for the third consecutive month in a row.

The Consumer Price Index (CPI) based inflation was 6.07 per cent in February. The inflation in the food basket was 7.68 per cent in March, up from 5.85 per cent in the preceding month.

The National Statistical Office (NSO) released a data on Tuesday revealed that the surging retail inflation was led by edible oils (18.79 per cent), vegetables (11.64 per cent), meat and fish (9.63 per cent), footwear and clothing (9.4 per cent), and fuel and light (7.52 per cent).

This is for the third straight month that the retail inflation remained above the central bank’s comfort zone.

The RBI, which mainly factors in the retail inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep the inflation between 2 per cent and 6 per cent.

The RBI, in its latest monetary policy review on Friday, kept policy rates unchanged but signalled that it would now prioritise on keeping inflation in check, over incentivising growth.

The central bank changed its growth projection downward and raised its inflation projection assuming crude oil prices at $100 per barrel due to the Russian invasion of Ukraine.

The GDP growth forecast was revised to 7.2 per cent for FY23 from 7.8 per cent projected during the February meeting. The inflation projection has been revised sharply from 4.5 per cent to 5.7 per cent for FY23.

The April 4-8 Reuters poll of 48 economists had suggested that inflation, as measured by CPI, will rise to 6.35 per cent in March on an annual basis, from 6.07 per cent in February. That would be the highest reading since November 2020.