The Wholesale Price-Indexed (WPI) inflation of the country slipped marginally to 2.47 per cent in March from 2.48 per cent reported for the previous month because of falling prices of food items, especially vegetables and pulses.
Build up inflation rate in the financial year so far was 2.47 percent compared to a build up rate of 5.11 percent in the corresponding period of the previous year.
Despite keeping rates on hold, the committee said that "ongoing tightening of monetary policy" would be needed to bring inflation back to the Bank's 2 per cent target.
The data disclosed that prices of food articles dipped by (-) 0.29 per cent from an acceleration of 0.88 per cent in the previous corresponding month. Deflation in pulses was 20.58 per cent, in vegetables (2.70 per cent), wheat (1.19 per cent) and egg, meat and fish (0.82 per cent) in March.
"After the surge seen in the previous month, the core-WPI inflation eased to a three-month low of 3.6 percent in March from 3.9 percent in February, reflecting a favourable base effect as well as the trend in a number of sub-sectors with a substantial weight such as textiles, basic metals, fabricated metal products, and motor vehicles, trailers and semi-trailers etc", Aditi Nayar, Principal Economist at ICRA said.
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According to a government data released today, food articles showed deflation at 0.29 per cent in March as against a 0.88 per cent inflation in the preceding month.
However, the price of raw silk, mesta and hides, sunflower, soyabean, fodder, raw wool, coir fibre and raw rubber moved up.
Wholesale inflation rate, measured by Wholesale Price Index (WPI), is a marker for price movements in bulk buys for traders and broadly mirrors trends in shop-end prices.
The index for fuel and power declined by 0.1 per cent to 98 (provisional) from 98.1 (provisional) in February.
On a year-on-year (YoY) basis, onion prices soared higher by 42.22 per cent whereas potato prices rose by 43.25 per cent. WPI Food Index holds 24.38% in the overall wholesale inflation.