India’s retail inflation rose to 6.7% in February mainly due to an uptick in food prices, according to data released today by the Ministry of Statistics & Programme Implementation (MoSPI) The retail inflation is mastered by the Consumer Price Index (CPI).
The rise in the CPI-based retail inflation was backed by the rise in the prices of food products including cereals, eggs, meat, milk products and vegetables. The prices of ‘ paan’, tobacco, clothes and other essential items have also increased. Retail inflation is also on the rise due to an increase in fuel prices, the National Statistical Office (NSO) said.
Retail Inflation for January 2022 was 6.1 percent and 5.3 percent in February 2021. The inflation rate has remained above the Reserve Bank of India’s (RBI) threshold of six percent for the second month in a row. For the next five years ending March 2026, the central bank has been mandated to keep retail inflation at four percent with a margin of two percent on either side. The RBI generally factors in the CPI data while deciding its bi-monthly monetary policy. Last month, the RBI’s Monetary Policy Committee (MPC) kept the repo rate unchanged for the tenth time in a row at four percent.
The Consumer Food Price Index (CFPI) or the inflation in the food basket also spiked on-month during February to 5.85 percent, from 5.43 percent in January, the data said. Due to an increase in oil and fat prices, the food basket grew 16.44 percent on year in February. Apart from this, vegetable prices saw a rise of 6.13 percent while meat and fish gained 7.45 percent and eggs rose 4.15 percent. The cereals and products segment rose 3.95 percent and sugar and confectionery grew 5.41 percent.
Besides food and beverages, fuel and light rose 8.73 percent, clothing and footwear increased 8.86 percent, and the housing segment rose 3.57 percent. Economic data released separately earlier today by the Ministry of Commerce and Industry indicated that Wholesale Price-Based Inflation (WPI) has accelerated to 13.11 percent in February, compared to 12.96 percent the previous month. This was largely driven by higher fuel prices. On a year-on-year basis, the WPI data showed an exponential rise last month over February 2021, when it stood at 4.83 percent.