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Costlier Food Items Push Inflation to 5.7%

Surging prices dash industry’s hopes of a rate cut by Reserve Bank in its forthcoming monetary policy review in June

Published: 16th April 2014 06:00 AM  |   Last Updated: 16th April 2014 01:11 AM   |  A+A-

Inflation in March rose to a three-month high of 5.7 per cent, digressing from the southward course that it was on. The spike came because of rise in food prices especially that of potato, onion and fruits.

The overall WPI inflation, which was on decline since December, had dropped to a nine-month low of 4.68 per cent in February.

According to the latest data released by the government on Tuesday, the January inflation number has been revised upward to 5.17 per cent as against earlier estimate of 5.05 per cent.

In March, potato prices were up 27.83 per cent as against 8.36 per cent in the previous month. Prices or inflation in onion prices was 1.92 per cent in March compared to contraction in price of the kitchen staple in the previous month.

The overall inflation in vegetable segment was 8.57 per cent as compared to about 4 per cent in February. Fruits were costlier by 16.15 per cent in March compared to 9.92 per cent.

Government further said the build-up of inflation rate in the 2013-14 financial year was 5.70 per cent compared to a build up rate of 5.65 per cent in the earlier fiscal.

The data further revealed that prices of sugar, pulses, cereals, cement and minerals eased in March compared to the previous month.

Reacting to inflation numbers that have gone up once again Sidharth Birla, president  FICCI said “Tackling food inflation should be the top priority for the incoming government. Unless this critical economic variable is brought under control, we could see a lasting impact on the overall growth scenario.”

The inflation in the food items, based on the wholesale price index (WPI), shot up by 9.9 per cent in March as against 8.12 per cent in the previous month.

Inflation in the fuel and power category (LPG, petrol and diesel) rose to 11.22 per cent versus 8.75 per cent in February.

In the monetary policy review earlier this month, the Reserve Bank had retained the key interest rate expecting rise in inflationary expectations.



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