India’s retail inflation galloped towards double-digits — it was 9.5% in March — amid fears that rain-induced supply constraints and a possible rise in fuel prices will knock up the cost of food and other items.
Retail inflation, based on the consumer price index (CPI), was 9.5% in March — up from 8.8% in February — driven by costly protein-based items such as milk, egg, meat, fish, oil and fats, government data released on Wednesday showed.
Unseasonal rains have affected vegetable crops across the plains of north India and can choke food grains supplies by harming harvesting.
“Food and primary inflation have shown some signs of hardening in the month of March 2012 which is a cause for some worry,” finance minister Pranab Mukherjee said on Tuesday.
Besides, prices of most manufactured products are expected to rise after companies fully factor in the tax hikes that Mukherjee had announced in the budget last month.An increase in retail prices of petrol and diesel are also widely expected after Parliament’s budget session gets over next month—a move that will raise goods’ prices because of higher cost of ferrying them across locations.