An exponential rise in food and fuel prices lifted India's wholesale inflation rate to 3.18 percent in April from a rise of 2.47 percent in the previous month, official data showed in New Delhi on Monday.
The government CPI (consumer price index) data showed food price inflation unchanged at 2.8 per cent in April, while the prices of pulses and product fell for the seventh straight month to 12.35 per cent.
The WPI inflation for February was revised upwards to 2.74 per cent from the provisional estimate of 2.48 per cent.
"Build up inflation rate in the financial year so far was 0.69 per cent..."
The rate of inflation based on WPI Food Index consisting of Food Articles from Primary Articles group and Food Product from Manufactured Products group increased from (-) 0.07% in March 2018 to 0.67% in April 2018.
"Overall global factors and the favourable base effect are likely to influence inflationary pressures in opposite directions". Housing inflation increased to 8.50 per cent in April from 8.31 per cent in March and inflation rate for "clothing and footwear" increased to 5.11 per cent in April from 4.91 per cent.
However, the price of radiators & coolers and chain (2 per cent each) and piston ring/piston & compressor (1 per cent) declined. Inflation in December was 3.58 per cent.
Other categories, however, recorded an increase in inflation.
Along with the rise in inflation, a jump in the global price of oil, India's costliest and largest import, overestimated government expenditure and a sharp weakening in the rupee could cause the RBI to review its long-standing neutral stance. "The positive support could come only if we have a solid monsoon performance giving a bumper food grain output", Shubhada Rao, chief economist of Yes Bank, said.
The central bank revised downward forecast for retail inflation to 4.7-5.1 per cent for April-September and 4.4 per cent for October-March. "The trajectory of RBIs policy in remainder of FY19 will be governed by the movement of oil prices".