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Inflation overshoots RBI target, up 8.98% in March

Inflation overshoots RBI target, up 8.98% in March

High prices of vegetables and manufactured items drove the headline inflation in March, way above the Reserve Bank of India's expectation of 8 per cent.

High prices of vegetables and manufactured items drove the headline inflation in March to 8.98 per cent, way above the Reserve Bank of India's expectation of 8 per cent.

The overall inflation measured on the basis of Wholesale Price Index (WPI) was 8.31 per cent in February.

The rise in overall inflation for the second month in a row may prompt the central bank to go for another round of policy rate hikes in its review meeting, scheduled for May 3.

According to the official data released on Friday, the high inflation was on account of rising prices of manufactured items, milk, vegetable and fruits. In addition, high fuel costs due to spiralling international crude oil prices also contributed to the phenomenon.

Besides, food inflation, which accounts for nearly 15 per cent of overall WPI inflation, stood at 8.28 per cent for the week ended April 2.

The prices of primary articles - food, non-food articles and minerals - shot up 12.96 per cent on an annual basis, according to the data. Food articles grew expensive by 9.47 per cent, cereals 3.96 per cent and, rice and wheat 2.69 per cent and 0.75 per cent, respectively.

However, the speed at which prices of pulses rose eased to 4.17 per cent on an annual basis.

During the month, fuel and power prices went up 12.92 per cent, driven mainly a 23.14 per cent rise in petrol prices and a 14.99 per cent jump in cooking gas (LPG) rates.

At the same time, the manufactured goods group index rose by 6.21 per cent on an annual basis. Manufactured items have the highest weight of 64.9 per cent in the WPI.

The WPI inflation for January was revised upwards to 9.35 per cent from the provisional estimates of 8.23 per cent.

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Published on: Apr 15, 2011, 12:54 PM IST
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