Inflation based on the Consumer Price Index (CPI) was at 5.1 per cent in January and 6.44 per cent in February 2023.

As per the data released by the National Statistical Office, retail inflation in the food basket was at 8.66 per cent in February, marginally up from 8.3 per cent in the previous month.

The Reserve Bank of India has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

Last month, the central bank projected the CPI inflation at 5.4 per cent for the current fiscal (2023-24) and recorded at 5 per cent in January-March quarter.

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Suvodeep Rakshit, senior economist at Kotak Institutional Equities, told Reuters,”February CPI inflation print does not add to any further worries. We expect the inflation trajectory to remain around 4.5%-5% in FY2025, with a sharp base effect led dip to around 3% in the second quarter.”

The economy expanded 8.4% in the final three months of December, its fastest pace in one-and-a-half years. The government revised its growth estimate for the current fiscal year to March 31 to 7.6% from 7.3%.

“Weak core inflation at a time of strong growth is a conundrum – the only reason could be the weak input price growth. Expect a status quo on policy rates in near term,” Devendra Kumar Pant, economist at India Ratings, told Reuters.

(With PTI, Reuters inputs)