Retail inflation dropped below 6% in March as a result of food prices moderating and a favourable base effect, and industrial output growth remained strong in February, providing much-needed relief from the grim outlook for the world economy.
Data from the National Statistical Office (NSO) revealed that consumer price index (CPI) inflation increased an annual 5.7% in March, less than the 6.4% in February and below the top band of comfort set by the central bank. In February, the food price index was close to 6%; now, it was 4.8%. Urban inflation was 5. 9%, while rural inflation was 5. 5%.
Vegetable prices contracted by 8. 5% while oils and fats declined 7. 9%. Core inflation (excluding food and fuel) also moderated marginally during the month but still remains stubborn.
The Reserve Bank of India (RBI) delayed rate hikes at its most recent policy review earlier this month, but governor Shaktikanta Das had issued a warning that the fight against inflation must continue until the RBI sees a sustained reduction in inflation that is closer to the objective. Considering the rigidity of the core or underlying inflation pressures, he claimed that predictions for the years 2023–24 indicate a slowing of inflation, however the disinflation is expected to be gradual and prolonged.