New Delhi: The Wholesale Price Index-based inflation rose to 4.17% percent in February 2021 as opposed to 2.03 percent a month ago. This is due to an increase in the price of fuel, power, and food. This is the highest since November 2018, when wholesale inflation was at 4.47 percent.
This data was higher than a recent poll conducted by news agency Reuters. The Reuters poll was conducted between March 5-9 with over 50 economists recording that the retail inflation climbed to 4.83 percent in February from January’s 4.06 percent.
According to data released by the National Statistical Office (NSO), the inflation in the ‘fuel and light’ category remained high at 3.53 percent during February compared to 3.87 percent in January.
The minutes of the Reserve Bank of India (RBI) Monetary Policy Committee’s February meeting revealed that the members raised concerns about the upside risks to inflation, but the bank kept its repo rate low at 4.0 percent stating that it would ensure ample liquidity.
The Monetary Policy Committee led by the RBI Governor Shaktikanta Das surmises that the gross domestic product (GDP) growth would be at 10.5 percent in the next fiscal year, lower than the projections by Economic Survey 2021 and International Monetary Fund.
There was a sharp incline in the prices of minerals (9.40 percent), crude petroleum and natural gas (6.50 percent), and food items (0.51 percent) increased in February 2021 as compared to January 2021. Prices of Non-food Articles (-0.51 percent) declined in February 2021 as compared to January 2021,” stated the ministry.
- The rate of inflation for LPG stood at 0.51 percent, while for petrol it was 0.83 percent.
- The rate of wholesale inflation for manufactured products during the month under review stood at 5.81 percent as against 5.13 percent in January.
- The food basket was at 3.31 percent as against -0.26 percent in January.
- The rate of wholesale inflation of fuel and power was at 0.58 percent as against -4.71 percent in January.
- Inflation for vegetables was -2.90 percent, for eggs, meat, and fish, the inflation rate stood at -0.78 percent.
Rahul Gupta, the Head of Research- Currency, Emkay Global Financial Services states, “Currently, CPI (consumer price index) is within RBI’s target range but at the April meeting, the central bank will have to tackle with increasing inflation and rising bond yields, as the cascading impact may slow India’s growth.”