Kamal Ghorui
India’s retail inflation edged higher in February, largely on the back of rising food prices, according to official data released on Thursday.Data from the National Statistics Office (NSO) showed that inflation measured by the Consumer Price Index (CPI) rose to 3.21 per cent in February, up from 2.74 per cent in January. Despite the increase, the headline inflation figure remained within the target band set by the Reserve Bank of India.State-wise data showed Telangana recording the highest inflation at 5.02 per cent, while Mizoram reported the lowest at 0.1 per cent.Under the government’s mandate, the central bank aims to keep inflation at 4 per cent with a tolerance band of 2 percentage points on either side.The February numbers are also the first to be calculated using the revised CPI series with 2024 as the base year, which was introduced last month.Food inflation recorded a noticeable sequential increase, rising to 3.47 per cent in February from 2.13 per cent in January, according to the NSO data. Prices of several commodities accelerated during the month, particularly silver, gold, diamond and platinum jewellery, as well as coconut-copra, tomato and cauliflower.However, some food items saw easing price pressures. Garlic, onion, potato, arhar and litchi recorded disinflation during the period.Regionally, inflation was slightly higher in rural areas compared with urban centres. Rural inflation stood at 3.37 per cent, while urban inflation came in at 3.02 per cent.Commenting on the data, Aditi Nayar, Chief Economist at ICRA, said the rise in inflation was largely concentrated in food categories. “The uptick in inflation was almost entirely led by the food and beverages (F&B) segment, which accounted for as much as 44 bps of the 47 bps rise in the headline print between these months,” she said as quoted by PTI.Core inflation , which excludes food and beverages, electricity, gas and other fuels, remained unchanged at 3.4 per cent between January and February.According to ICRA’s estimates, movements in crude oil prices could significantly affect inflation.Meanwhile, Chief Economist & Executive Director, Anand Rathi Group Sujan Hajra, told TOI, “CPI inflation edged up to 3.2% in February from 2.7% in January, led largely by food, with food inflation rising to 3.5% from 2.1%. Core inflation, however, remained broadly stable at 3.4%, indicating that the underlying price trend remains moderate. The recent spike in oil and gas prices raises some upside risks to inflation in the coming months.“He further added, “these pressures are likely to be transitory. If anything, the RBI may respond with a more accommodative liquidity stance to smoothen financial market volatility arising from geopolitical uncertainties. The latest inflation print may nevertheless have mildly negative near-term implications for the debt, equity and foreign exchange markets.”The next meeting of the Monetary Policy Committee of the Reserve Bank of India is scheduled for April 6–8.
