New Delhi: Easing food prices pulled down retail inflation in March to a 3-month low of 5.17 per cent despite unseasonal rains, renewing industry clamour for further cut in RBI policy rate to boost growth. Retail inflation as measured by Consumer Price Index was 5.37 per cent in February, and 5.19 per cent in January. It was 8.25 per cent in March last year, government data released today said. The easing prices of milk, vegetables and fruits brought down the overall food inflation to 6.14 per cent in March, from 6.79 per cent recorded in February. After cutting rates twice this year, in its first bi-monthly monetary policy announcement in the new fiscal, the Reserve Bank had kept the key policy rate unchanged on fears of unseasonal rains impacting food prices.
Industry body CII’s Director General Chandrajit Banerjee said inflation continues to remain moderate and has in fact declined when compared to the previous month. “This should persuade the RBI to resume its rate easing cycle to support growth without being too concerned about the impact on inflation,” he said. Anis Chakravarty, Senior Director with Deloitte in India, said the decline in retail inflation is a “positive development… Despite the unseasonal rains, food inflation declined (month-on-month)”.
The decline in inflation, he said, “reinforces the view that further monetary easing is imminent”. Retail inflation declined for ‘cereals and products’, although it was up in the case of protein rich items like ‘meat and fish’.