Food and fuel inflation inches higher

India's food inflation rose marginally at 16.35% in the week ended March 20 as against 16.22% in the previous week, the Government said. The index for Food Articles group rose by 0.6% to 284.7. At the same time, inflation in the Non-food Articles group fell to 12.57% from 13.06% in the previous week. Inflation for the Primary Articles group stood at 13.86% in the week under review as against 13.88% in the week ended March 13, the data showed. It was at 5.2% during the corresponding week of the previous year. The WPI for this group rose by 0.4% to 283.4. Fuel & Power inflation increased a little bit at 12.75% in the week ended March 20 versus 12.68% in the previous week.

The index for this major group rose marginally to 361.8 from 361.7 in the preceding week. India's annual wholesale inflation rose to 9.89% in February, compared with 8.56% rise in January and 3.50% a year ago. Headline inflation, which was initially driven by high food prices, is now spreading to other segments of the economy. Inflation in manufacturing accelerated to 7.4% in February from 6.5% in January. With inflation spreading to non-food items, the Reserve Bank of India (RBI) is likely to further tighten its monetary stance in its forthcoming annual policy on April 20. The RBI recently raised the repo and the reverse-repo rates by 25 basis points to 5% and 3.5%, respectively, to contain inflation. Bankers say they will wait for RBI's annual monetary policy to decide on hiking interest rates.