Retail Inflation Surges 8-Year High Of 7.79% In April On Costlier Fuel, Food; March IIP Growth At 1.9 Per Cent

Inflation in the food basket rose to 8.38 per cent in April from 7.68 per cent in the preceding month, while 1.96 per cent in the year-ago month, NSO data showed

The previous high in the consumer price index (CPI)-based retail inflation was recorded at 8.33 per cent in May 2014. Image: Getty

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 New Delhi: Retail inflation jumped to an eight-year high of 7.79 per cent in April, 2022, mainly because of rising food and fuel prices, government data revealed on Thursday.

This may prompt the Reserve Bank of India (RBI) to go in for another interest rate hike in the next month policy review to tame price rise.
In a surprise move last week, the RBI raised the interest rate by 40 basis points to 4.40 per cent.

Inflation has remained above the central bank’s comfort zone of 6 per cent for four months in a row, primarily because of ongoing Russia-Ukraine conflict, which has affected the commodity prices and caused disruption in commodity supply across the globe.

The previous high in the consumer price index (CPI)-based retail inflation was recorded at 8.33 per cent in May 2014. CPI inflation was 6.95 per cent in March this year and 4.23 per cent in April 2021.

According to the data released by the National Statistical Office (NSO) on Thursday, inflation in the food basket rose to 8.38 per cent in April from 7.68 per cent in the preceding month, while 1.96 per cent in the year-ago month.

The rate of price rise in 'fuel and light' category in the retail inflation basket quickened to 10.80 per cent in April this year from 7.52 per cent in the preceding month.

Inflation also remained at a higher level in the ‘oils and fats’ category by 17.28 per cent (18.79 per cent in March 2022) during the month. Ukraine is one of the major sunflower oil producers in the world and India imports a major portion of the commodity from the east European country. Besides, Ukraine is also a key supplier of fertiliser to India.

Vegetables saw an inflation print of 15.41 per cent during the month as against 11.64 per cent in March, the data showed.

India's industrial production

Meanwhile, India's industrial production (IIP) has grown a lacklustre 1.9 per cent on year in March, pulled down by an unfavourable base effect and price rise.

Industrial output had grown 1.7 per cent in February as well. Industrial production had soared 24.2 per cent in March last year.