Inflation slipped to a nine-month low of 4.68 per cent in February on the back of easing prices of onion and potatoes and giving comfort levels for a possible rate cut by the Reserve Bank of India (RBI) in the monetary policy review on April 1.
Inflation based on the Wholesale Price Index (WPI) came down to 4.68 per cent in February from 7.28 per cent a year ago. It was 5.05 per cent in January 2014.
Reacting to the decline in inflation, Finance Minister, P. Chidambaram said there was need to watch the inflation movement carefully, and expressed happiness that overall inflation was coming down.
Food inflation, which has been a major cause of concern for the government, dropped to 8.12 per cent in February, compared to 8.8 per cent in January as the rate of price rise slowed in almost all items, except fruits, rice and milk. Inflation, which is on decline since December, was 5.05 per cent in January. Prior to February, the lowest WPI was recorded in May, 2013, at 4.58 per cent. In June, it had inched up again to 5.16 per cent.
As per the data released here, the rate of price rise for onions —- on an annual basis — contracted 20.06 per cent in February. Similarly the rate of price rise in potatoes slowed to 8.36 per cent. The overall inflation in the vegetable basket dropped to 3.99 per cent, from 16.6 per cent in January.
There was also a drop in prices of pulses, cereals and wheat. However, fruits, milk and other protein-rich items like egg, fish and meat became costlier in February compared to the previous month. Inflation in the manufactured items such as sugar and edible items, was 2.76 same as in January.
In a related move, the government revised the inflation figures for December upwards to 6.4 per cent, from 6.16 per cent estimated earlier. The Reserve Bank of India is scheduled to announce the next monetary policy on April 1.