Food inflation climbs, fuel inflation steady

India's food inflation jumped to 17.7% in the week ended March 27 as against 16.35% in the previous week, the Government said. The index for Food Articles group rose by 0.9% to 287.3. Inflation in the Food Articles group stood at 6.97% in the corresponding period a year ago.

Inflation in the Primary Articles group rose to 14.5% in the week under review as against 13.86% in the week ended March 20, the government data showed today. It was at 5.15% during the corresponding week of the previous year. The WPI for this group rose by 0.6% to 285.1.

At the same time, inflation in the Non-food Articles group fell to 11.56% from 12.57% in the previous week, the Commerce Ministry said today. Inflation in the Minerals group stood at 9.55% versus 9.62% in the preceding week, it added.

Inflation in the Fuel & Power group increased slightly to 12.71% in the week ended March 27 versus 12.75% in the previous week, the government data revealed today. The index for this major group remained unchanged at its previous week's level of 361.8. Inflation in this group was at (-)6.09% during the year-ago period.

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. Last month, the RBI surprisingly raised the repo and the reverse-repo rates by 25 basis points to 5% and 3.5%, respectively, to contain inflation.