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Costlier food pushes retail inflation to 17-month high of 6.95% in March

Costlier food pushes retail inflation to 17-month high of 6.95% in March

New Delhi: Costlier food items pushed the retail inflation to a 17-month high of 6.95 per cent in March, much above the upper tolerance level of the Reserve Bank, according to government data released on Tuesday.

This is the third consecutive month that the Consumer Price Index (CPI)-based inflation remained above the 6 per cent mark. The previous high at 7.61 per cent was recorded in October 2020.

The inflation in the food basket shot up to 7.68 per cent in March 2022, from 5.85 per cent in the preceding month.

Retail inflation was 5.52 per cent in March 2021, while the food inflation stood at 4.87 per cent. The RBI's tolerance limit of retail inflation is 4 per cent with a 2 per cent margin on either side. On a quarterly basis, the retail inflation during January-March works out to be 6.34 per cent.

As per the data by the National Statistical Office (NSO), inflation in oils and fats during the month soared to 18.79 per cent as the geopolitical crisis due to the Russia-Ukraine war has fuelled edible oil prices. Ukraine is a major exporter of sunflower oil.

In vegetables, inflation quickened to 11.64 per cent in March, while in 'meat and fish' the rate of price rise stood at 9.63 compared to February 2022.

However, inflation in the 'fuel and light' category was lower at 7.52 per cent in March from 8.73 per cent in the preceding month.

Announcing the first bi-monthly monetary policy of 2022-23 last week, the Reserve Bank of India raised the retail inflation projection for the current fiscal to 5.7 per cent from an earlier forecast of 4.5 per cent. However, it expects moderation in prices of cereals and pulses on a likely record harvest of the winter season (rabi) crop.

The central bank had also said that given the excessive volatility in global crude oil prices since late February and the extreme uncertainty over the evolving geopolitical tensions, any projection of growth and inflation is fraught with risk, and is largely contingent upon future oil and commodity price developments.

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