Rising food prices push consumer price inflation to 17-month high of 6.95% in March

Consumer price inflation, based on the Consumer Price Index (CPI), in India soared to a 17-month high of 6.95 per cent in March, continuing to remain above the Reserve Bank's upper tolerance level, according to official data released on Tuesday. CPI inflation rose mainly on account of rising prices of essential food items like 'oils and fats', vegetables and protein rich items such as 'meat and fish'. 

This is the third consecutive month that the inflation remained above the 6 per cent mark. The previous high at 7.61 per cent was recorded in October 2020. The inflation in the food basket shot up to 7.68 per cent in March 2022 from 5.85 per cent in the preceding month. 
Consumer price inflation for rural areas stood at 7.66 per cent in March 2022 against 6.38 per cent in February, while the inflation rate for urban consumers rose to 6.12 per cent in March 2022, from 5.75 per cent in February.
Food price inflation rate eased to 7.68 per cent in March 2022 from 5.85 per cent in February.
While food price inflation for rural areas rose to 7.68 per cent in March 2022 from 5.81 per cent in February, food price inflation rate for urban consumers rose to 7.94 per cent in March 2022 from 5.76 per cent in February.
As per the CPI data, inflation in 'oils and fats' in March soared to 18.79 per cent as the geopolitical crisis due to the Russia-Ukraine war pushed edible oil prices higher. Ukraine is a major exporter of sunflower oil.
In vegetables, inflation quickened to 11.64 per cent in March while in 'meat and fish' the rate of price rise stood at 9.63 compared to February 2022.
However, inflation in the 'fuel and light' category was lower at 7.52 per cent in March against 8.73 per cent in the preceding month.
Last week, RBI raised the retail inflation projection for the current fiscal to 5.7 per cent from an earlier forecast of 4.5 per cent.
However, it expects moderation in prices of cereals and pulses on a likely record harvest of the winter season (rabi) crop.
The central bank had also said that given the excessive volatility in global crude oil prices since late February and the extreme uncertainty over the evolving geopolitical tensions, any projection of growth and inflation is fraught with risk, and is largely contingent upon future oil and commodity price developments.