According to recent government data released on Friday, April 12, 2024, retail inflation in Bharat fell to a 10-month low of 4.85% in March on an annual basis, down from 5.09% in February. This decline was slightly lower than what economists had predicted in a Reuters poll, where they expected it to come down to 4.91%.
The inflation rate has consistently remained within the Reserve Bank of India’s (RBI) tolerance range of 2-6%. While there was a decrease of -0.11% in the previous month, March saw a slight increase of 0.16% on a sequential basis.
Industrial Production Surges to Four-Month High
In another significant development, Bharat’s industrial production soared to a four-month high, registering a growth of 5.7% in March, as per data from the Ministry of Statistics and Programme Implementation. This is a notable increase from the 4.2% recorded in the previous month, indicating a positive momentum in the industrial sector.
Food and Fuel Prices
Food inflation, which constitutes a substantial portion of the overall consumer price basket, rose by 8.52% in March, slightly down from the 8.66% increase seen in February. However, fuel prices witnessed a year-on-year decline of 3.2% in March, compared to a 0.77% fall in February.
Rural and Urban Disparities
The inflation rates in rural and urban areas showed a decrease from the previous year, standing at 5.45% and 4.14%, respectively, in March. This is a decline from 5.51% and 5.89% recorded in the same month the previous year, indicating a narrowing gap between rural and urban inflation rates.
Sector-wise Analysis
Prices of cereals saw an increase to 8.37% from 7.60% a month earlier, while meat and fish rose to 6.36% from 5.21% in March. However, both vegetables and pulses showed a slight downward trend. Overall, food and beverages inflation stood at 7.68% in March, down from 7.76% in February.
Monetary Policy Committee’s Decision
The latest inflation data comes on the heels of the RBI’s Monetary Policy Committee (MPC) announcement on April 5, where they decided to maintain the policy repo rate at 6.5% for the seventh consecutive time. The central bank’s latest forecast projects Consumer Price Index (CPI) inflation to be 4.5% for the current financial year, indicating a cautious approach towards monetary policy amid the changing economic landscape.
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