CPI inflation in March eases to six-month low of 4.83%

Showing some signs of relief, the retail inflation or the Consumer Price Index (CPI) for the month March 2016 eased to a six- month low on account of cheaper food articles such as vegetables and pulses. The retail inflation fell for the second straight month to 4.83 percent in March as compared to 5.18 percent in February. Consumer inflation was seen below this level at 4.41 percent in September 2015. Meanwhile, CPI in February was revised upwards to 5.26 percent from 5.18 percent earlier. 

As per the data released by the Ministry of Statistics and Programme Implementation, Consumer Price Index numbers on Base 2012=100 for Rural, Urban and Combined for the Month of March 2016 stood at 5.70%, 3.95% and 4.83% respectively as against 6.05%, 4.30% and 5.26% in the month of February 2016. Meanwhile, Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for the month of March 2016 stood at 5.79%, 3.98% and 5.21% respectively. The General Indices (Provisional) for the month of March 2016 for Rural, Urban and Combined were 128.0, 123.8 and 126.0 respectively. The CFPI for Rural, Urban and Combined for the same month were 129.8, 128.0 and 129.2 respectively.

Food inflation for March too softened at 5.21 percent as against 5.30 percent in February. The rate of price rise in vegetables was at 0.54 percent, oils and fats 4.85 percent, milk and products 3.33 percent, while fruit prices deflated further at (-)1.10 percent in March. Pulses too turned cheaper, as the inflation print came in at 34.15 percent during the month. However, inflation in sugar and confectionery shot up at 3.92 percent in March from 0.51 percent in February. And for pan tobacco and intoxicants, the inflation stood at 8.51 percent over 8.39 percent. Retail price rise of cereals and products rose to 2.43 percent and that for meat and fish category, it moved up slightly with an inflation print of 7.74 percent. Likewise, prices of eggs shot up further during the month with inflation standing at 6.68 percent.

Last week, RBI governor Raghuram Rajan had said that inflation has evolved along the projected trajectory and the target set for January 2016 was met with a marginal undershoot. The central bank said headline Consumer Price Index based inflation is projected to moderate in 2016-17 to around 5%. In its recent monetary policy review the central bank had cut key interest rate by 25 basis points. But with inflation easing further, the clamor for another 25 basis points cut is only going to get louder.