Representative image showing a food basket and Indian rupee notes.
Credit: iStock Photo
New Delhi: Retail inflation in February eased to a four-month low of 5.09 per cent, remaining within the Reserve Bank's comfort zone of 6 per cent for the sixth month in a row, showed a government data released on Tuesday.
The February inflation print based on Consumer Price Index (CPI) was almost unchanged compared to the January number of 5.1 per cent, though prices of certain items in the food basket firmed up.
The inflation in the food basket rose marginally to 8.66 per cent in February from 8.3 per cent in the preceding month, according to the data released by the National Statistical Office (NSO).
On month-on-month basis, inflation eased marginally in case of vegetables, fruits, 'oils and fats' and 'pulses and products' in February. However, the rate of price rise was higher in 'cereals and products', 'meat and fish' and 'milk and products' segments.
The food basked has nearly 50 per cent weight in the CPI.
NSO said the average inflation in the rural areas was higher at 5.34 per cent in February compared to 4.78 per cent in urban parts of the country.
Among states, the highest inflation was in Odisha at 7.55 per cent during February and lowest in Delhi at 2.42 per cent.
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 current fiscal (2023-24) and 5 per cent for January-March quarter.
Commenting on the CPI data, Aditi Nayar, Chief Economist, ICRA, said barring food and beverages, the inflation across all other sub-groups eased in February 2024, indicating that the momentum in the non-food items continued to track a welcome moderation.
"In an encouraging trend, the core-CPI (CPI excluding food and beverages, fuel and light and petrol and diesel for vehicles) eased to 3.5 per cent in February 2024 from 3.7 per cent in January 2024, which is the lowest reading for this metric based on the available data since Jan 2015," she said.
The NSO collects price data from selected 1,114 urban markets and 1,181 villages covering all states and UTs.
The RBI's rate setting panel, Monetary Policy Committee (MPC), mainly factors in the retail inflation while deciding the benchmark interest rate.