Drop in prices of food items, including vegetables, as well as fuel brought down the April inflation to 5.2%, ahead of the RBI's monetary policy review in early next month. The inflation, measured on Wholesale Price Index (WPI), was 5.7% in March.
As per the data released by the government today, the WPI inflation in the overall food segment eased to 8.64% in April, from a high of 9.9% in March. Onion prices contracted 9.76% in April as against a rise of 1.92% in the previous month. There was a drop in the rate of price rise in protein rich items like egg, fish and meat to 9.97 from 11.19% in March.
Although there was increase in potato prices, the overall inflation in the vegetable segments eased to 1.34% from 8.57% in March. Fruits too were marginally costlier in April as compared to the previous month. The WPI data further showed easing inflation in fuel and power segments as well as the manufactured items group, which include sugar and edible oils. The rate of price rise in the fuel and power segment was 8.93%, as against 11.22% in March.
Inflation based on Consumer Price index, on the other hand, had shot up to a three-month high of 8.59 (rpt) 8.59%. The RBI considers both the inflation data, along with other economic indicators, while deciding monetary policy.
Amid demand for reduction in key interest rate to boost economy, the Reserve Bank's monetary policy review on June 3 would be keenly watch.
In April, it had chosen to keep the policy rate (repo) unchanged at 8% in as retail inflation was "sticky".
Meanwhile, the government has revised the February WPI inflation upward to 5.03% from earlier estimate of 4.68%. In April, 2013 the WPI inflation was 4.77%. Build up in inflation in the 2013-14 fiscal was 0.22%, compared to 0.71% in the previous fiscal.