Inflation dips to -2.33 per cent in March
Slip has prompted the industry to renew its demand for further rate cut by the RBI
New Delhi: Inflation based on Wholesale Price Index (WPI) touched a record low in March contracting by 2.33 per cent on cheaper manufactured goods and food items. This has prompted the industry to renew its demand for further rate cut by the Reserve Bank. Inflation in manufactured items slipped in to the negative territory, showing that industry has lost the power to increase prices due to poor demand.
Deflation in the manufactured products category was at -0.19 per cent, the lowest in over five years. Last time the rate of price rise in manufactured items had contracted in July 2009 at -0.2 per cent. Inflation has been in the negative zone since November 2014 mainly on account of cheaper food and fuel products.
It was at -2.06 per cent in February, -0.39 per cent in January, -0.50 per cent in December and -0.17 per cent in November. It was 6 per cent in March 2014. “Although the impact of excessive rainfall on wholesale food prices was less broad-based than feared, the double-digit inflation for condiments and spices (17.5 per cent), pulses (13.2per cent) and fruit (12.6 per cent) in March 2015 is a cause for concern,” said Aditi Nayar, senior economist at rating agency ICRA.
She said that the sub-zero print for core-WPI inflation in March 2015 would have a limited impact on the timing and magnitude of rate cuts by the Reserve Bank of India (RBI).