Higher Prices of Milk, Vegetables etc led Retail inflation to shoot up to 9.47% in March 2012

As per the government data released on 18 April 2012, retail inflation shot up to 9.47% in March 2012 because of higher prices of milk, vegetables, protein-based items and edible oil products. Retail inflation, based on the Consumer Price Index (CPI) had recorded 8.83% in February 2012. The All-India CPI is prepared in addition to the three retail price indices for agricultural labourers, rural labourers and industrial workers prepared by the Ministry of Labour.

The prices of vegetables soared by 20.58 percentage points, from -4.27 per cent in February to 16.58 per cent in March 2012. In rural areas, the rate of price rise in vegetables was however less- only 6.52 per cent, against -4.83 per cent in February 2012. The rate of price rise for vegetables across the country rose to 9.55 per cent, against 4.73 per cent in February 2012.

The prices of milk and products rose by 15.22%, while oils and fats turned costlier by 14.20% in March 2012. While sugar saw a marginal rise of 3.78% in March, pulses and products moved up by 4.89%, over March 2011. Prices of cereal and its products also saw a rise of 2.78% over the March 2011 level. Prices of egg, fish and meat also shot up 10.06%. Edible oil and fats also recorded inflation, rising from 12.76 per cent in February to 14.20 per cent in March 2012.

Non-alcoholic beverages and vegetables became costlier by 10.20% and 9.55% respectively. Prices of fuel and light, and clothing, bedding and footwear segments also remained in the double-digit. Inflation rates for rural and urban areas were 8.79% and 10.30% respectively in March.

However inflation based on Wholesale Price Index showed only a marginal decline to 6.89% in March 2012. Wholesale price index (WPI)-based inflation fell to 6.89 per cent in March from 6.95 per cent in February 2012. As per the index food inflation rose to a five-month high of 9.94 per cent, compared with 6.07 per cent in February 2012 and deflation in January 2012. Given that the food basket has more weight in the CPI than in the WPI, overall inflation numbers showed a rise in the case of the retail price index.