INDIA’S RETAIL INFLATION INCHES UP TO 3.8% IN MARCH ON FESTIVAL DEMAND

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NEW DELHI (TIP): Rise in the prices of sugar, confectionary, snacks and fruits pushed up India’s consumer price inflation (CPI) firmed up to 3.81% in March from 3.65% in February, government data showed on Wednesday.

The slowing pace of remonetisation, or pumping new Rs 500 and Rs 2,000 notes into circulation, during March to replace the scrapped Rs 500 and Rs 1,000 notes in November, helped inflation to stay within 4% in the financial year ending March 2017.

Retail food inflation was at 1.93% in March, slightly lower than 2.01% in February, as prices of pulses and vegetables fell by a little over 8%.

However, sugar and confectionaries were costlier by 16.5% while prices of snacks, sweets and prepared meals were up 6.13% due to festival demand during Holi.

“The worrisome feature is that non-food components still witnessed high rates–clothing 4.6%, fuel and light 5.6%, housing 5%, transport 6%. Hence, core CPI is a worry,” said Madan Sabnavis, chief economist of Care Ratings.

“We expect CPI inflation to range between 4.5-5% for FY18 assuming a normal monsoon,” he added.

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