New Delhi: Declining price of vegetables pulled down inflation to over three-year low of 5.96 percent in March, which may prompt the Reserve Bank to consider a rate cut in its annual monetary policy next month.
Inflation based on the Wholesale Price Index (WPI) stood at 6.84 percent in February. In March, 2012, it was 7.69 percent.
The 5.96 percent March-end inflation is much lower than Reserve Bank's projection of 6.8 percent. The decline in inflation and a slowdown in industrial output growth to 0.6 percent in February have raised expectations of a rate cut by RBI next month to boost growth. The RBI will announce its annual monetary policy on May 3.


As per official data released on Monday, inflation in the manufactured items category witnessed a marginal decline at 4.07 percent in March. It was 4.51 percent in February.
Inflation in food articles category, which has a 14.34 percent share in the WPI basket, too declined to 8.73 percent. Inflation in this category was at 11.38 percent in February.
The easing in food inflation was helped by a sharp drop in prices of vegetables. Inflation in vegetables stood (-) 0.95 percent in March, from 12.11 percent in the previous month.
The rate of price rise in onion stood at 94.85 percent for the month of March, as against the inflation rate of 154.33 percent in February.
Inflation in rice eased to 17.90 percent in March, as against 18.84 percent in the previous month. Inflation for January was revised upwards to 7.31 percent, from 6.62 percent as per provisional estimates.


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