Retail inflation rises to 5.52% in March due to higher food prices, shows govt data

New Delhi: Retail inflation rose to 5.52 percent in March, mainly on account of higher food prices, government data showed on Monday. The consumer price index (CPI) based retail inflation stood at 5.03 percent in February. The rate of price rise in the food basket accelerated to 4.94 percent in March, as against 3.87 percent in the preceding month, as per data released by the National Statistical Office (NSO). Inflation in ‘fuel and light’ category was 4.50 percent during the month vis-a-vis 3.53 percent in February. Earlier this month, the Reserve Bank of India had projected the retail inflation at five percent in the January-March quarter of 2020-21 and at 5.2 percent in the first two quarters of the current fiscal. After breaching the upper tolerance threshold of 6 percent for six consecutive months (June-November 2020), CPI inflation fell in December 2020 and eased further in January 2021 to 4.1 percent on the back of a sharp correction in vegetable prices and softening of cereal prices. However, it rebounded to 5 percent in February, driven primarily by base effects. The Reserve Bank, which mainly factors in the retail inflation while arriving at its monetary policy, has been asked to keep CPI inflation at four percent with a margin of two percent on either side. The central bank retained the key lending rate (repo) in its last monetary policy citing inflationary concerns.