Inflation remains in negative zone at -0.85% in March
India’s wholesale price-based inflation stood in negative territory for the 17th consecutive month at (–) 0.85% in March.
The annual rate of inflation was (-) 0.91% in February and (-) 2.33% in March 2015.
Food inflation remained at 3.73% in March this year, up from 3.35% in February, but significantly less from 6.27% in March 2014-15, a latest data released by the Ministry of Commerce & Industry showed.
Inflation of onion and oil segment played a balancing act; as prices of some food articles, particularly pulses, remained costly. Inflation in pulses continued to be the highest at 34.45% in March, while the same for onion and oil segments registered (-) 17.65% and (-) 8.30%, respectively.
Inflation in vegetable and power segment stood at 3.73% and (-) 0.13% in March.
Earlier this month, the Reserve Bank of India (RBI) had slashed the key policy rate by 0.25% citing retail inflation and normal monsoon as the main reasons behind its rate-cut decision. It had projected retail inflation to be close to 5% this fiscal.
Many economists and industry analysts said the steady inflation in March was in line with their earlier predictions.
“WPI inflation remained steady in March 2016 as compared to the previous month, in line with our expectation (-0.8%),” said Aditi Nayar, Senior Economist, ICRA Ltd.
While the Associated Chambers of Commerce and Industry of India (ASSOCHAM) President Sunil Kanoria said, “Although predictions of weather department are in favour of ongoing Rabi season but policymakers should contain the upward price pressure if it exists in the coming months.
Kanoria, however, expressed concerns over the upward trend of pulses prices for the last six month and a continuous fall in manufactured products; he urged the government to address these two issues.
“Since the government has shown its commitment to support industry and considering that recent RBI policy stance to kick start investment and credit cycle can have positive impact on India’s economy in the coming months, WPI is likely to move upwards,” Kanoria added.
