Retail inflation in India eased further in April to 4.7 per cent as against 5.7 per cent the previous month.
The sub-index for cereals and products and eggs declined in April, data released by the Ministry of Statistics and Programme Implementation on Friday revealed. The inflation in rural and urban was 4.68 per cent and 4.85 per cent, respectively.
India’s headline consumer price index-based (CPI) inflation (or retail inflation) has gradually declined from its peak of 7.8 per cent in April 2022 to below 6 per cent now, which is below RBI’s upper tolerance band.
India’s retail inflation was above RBI’s 6 per cent target for three consecutive quarters and had managed to fall back to the RBI’s comfort zone only in November 2022.
The RBI’s monetary policy actions over the past year seem to have reaped dividends in managing inflation.
The Reserve Bank of India, in its first monetary policy review meeting this fiscal, decided to keep the key benchmark interest rate — the repo rate (the rate at which it lends to banks) — unchanged at 6.5 per cent with readiness to act should the situation so warrant.
Inflation has been a concern for many countries, including advanced economies, but India has managed to steer its inflation trajectory quite well.
Assuming an annual average crude oil price (Indian basket) of USD 85 per barrel and a normal monsoon, CPI (or retail) inflation is projected to moderate to 5.2 per cent for 2023-24 in India as estimated by RBI in its April monetary policy meeting; with Q1 at 5.1 per cent; Q2 at 5.4 per cent; Q3 at 5. 4 per cent; and Q4 at 5.2 per cent.
