Retail inflation in India edged up to 3.93% in May from 3.48% in April, driven by a rise in food prices, government data showed on Friday.
Inflation in the food basket, measured by the Consumer Food Price Index, accelerated to 4.78% in May from 4.2% the previous month, according to data released by the National Statistical Office (NSO).
Among items recording the sharpest price increases were precious metal jewellery, tomatoes, ginger, raisins and monacca. Potatoes, peas, motor cars and jeeps, cumin, and motorcycles and scooters were among the items with the lowest inflation rates at the all-India level in May.
The Reserve Bank of India (RBI), which mainly factors in CPI when arriving at its monetary policy, has been mandated by the government to ensure that headline inflation remains at 4 per cent, with a 2 per cent margin on either side.
Last week, the RBI raised its inflation projection for the current fiscal to 5.1 per cent from 4.6 per cent, largely due to mounting input costs, driven by the pass-through of higher global energy prices to retail petrol and diesel prices.
Since May, retail fuel prices have been raised cumulatively by 7.4 per cent for petrol and 8.4 per cent for diesel.
The increase implies a direct impact of about 36 basis points on headline inflation, which, along with second-order effects, would get reflected in consumer price (CPI) inflation in the coming months, the RBI said in its monetary policy statement early this month.
(With inputs from PTI)