India’s retail inflation rises to 6.95% in March, highest in 17 months

New Delhi: India’s retail inflation surged to a 17-month high of 6.95 per cent in March from 6.07 per cent in the previous month due to a sharp increase in food prices, the National Statistical Office (NSO) data showed on Tuesday.

Retail inflation as measured by the Consumer Price Index (CPI) has remained above the upper limit of the Reserve Bank of India (RBI) tolerance band for the third consecutive month. The retail inflation stood at 6.01 per cent in January 2022.

The inflation is sharply higher when compared with the previous year. The CPI-based inflation stood at 5.52 per cent in March 2021.

Persistent price pressures in the economy, evident from above-target inflation, nudged central bank policy makers last week to acknowledge that price stability required more focus than economic growth. That’s the first time the messaging has changed since the outbreak of coronavirus more than two years ago.

“The large upside surprise led by food prices will lead to a re-calibration around expectations from the RBI in the near term for policy normalization,” said Rahul Bajoria, an economist with Barclays Plc in Mumbai.

The price rise was sharper in rural India than in urban. CPI for rural India surged to 7.66 per cent in March from 6.38 per cent in the previous month.

CPI-based inflation for urban India rose to 6.12 per cent in March 2022 from 5.75 per cent in the previous month.

The CPI inflation data is released monthly by the NSO, Ministry of Statistics and Programme Implementation.

With inputs from Bloomberg and ANI