Inflation Numbers Rise In March, Particularly Due To Higher Food Costs

Inflation continued to show a declining trend since the month of December in the current fiscal year, until recently when it rose to 5.70% in the month of March. The Wholesale Price Index (WPI) in the month of March 2014 was the highest as compared to last three months. This was due to a quick rise in the prices of primary articles and fuel & power.

The appreciated price of primary articles, which contributes to a total weightage of 20.12% of the total WPI basket, has led to an increase in the overall inflation in the month of March 2014. The inflation in primary articles has surged to 7.66% in the month of March 2014 as compared to 6.33% in the month of February 2014. The rise in inflation in primary articles was on account of increased prices of food articles (9.9%) and a considerable increase in the price of potato (27.83%). Onion prices went up by 1.92% in March 2014, as against a contraction of 20.06% in February. The overall inflation in the vegetable segment was reported at 8.57% in March as compared to 4% in February, whereas inflation in the fruit segment increased by 16.15% in the month of March 2014 as compared to 9.92% in the month of February 2014.

The increase in price of fuel & power was also one of the reasons which led to a rise in inflation. The fuel & power segment, which has a total weightage of 14.91% has surged to 11.22% in the month of March 2014 as compared to 8.75% in February 2014. The rise in inflation in the said segment was due to increased prices of the liquefied petroleum gas (9.28%) and high speed diesel (14.63%) during the month of March 2014.

Inflation in manufactured products, which has a total weightage of 64.97% in the WPI basket was 3.23% in the month of March 2014 as compared to 2.76% in the month of February 2014. The major contributor to inflation in the above segment was beverage and tobacco products (7.43% in March against 5.10% in February) and food products (1.87% in March as against 0.90% in February).

Hence, what we can conclude from the above mentioned data is that inflation was definitely high in the month of March due to increased prices of primary articles and fuel & power, whereas the segment which eased during the month was sugar, pulses, cereals, cement and minerals as compared to the month of February 2014.