Retail inflation plummeted for the first time after six months to 6.58 per cent in February as prices of vegetables and other kitchen items reduced, the government revealed on Thursday.
The Consumer Price Index (CPI) based retail inflation, remains above the comfort level of the Reserve Bank of India.
The retail inflation stood at 7.59 per cent in January this year and 2.57 per cent in February 2019, Firstpost reported. The inflation in the meat and fish segment was 10.2 per cent in February as compared to 10.5 per cent in the previous month.
CPI inflation has been increasing since August 2019 and has reduced for the first time since then. The Ministry of Statistics & Programme Implementation in its data has revealed that inflation in vegetable prices reduced to 31.61 per cent from 50.19 percent in January.
The rate at which the price rose was also milder in case of pulses and eggs. The inflation in the food items was 10.81 per cent in February 2020, lower from 13.63 per cent in January, as per the National Statistical Office (NSO) data. However, the inflation almost doubled in 'fuel and light' sector to 6.36 per cent in February.
The government has mandated the Reserve Bank Of India to keep inflation at nearly 4 per cent. In its last meeting, the RBI maintained the key lending rate constant at 5.15 per cent amid high inflation.
Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services, said that the retail inflation for February has reduced due to a reduction in food prices.
"Due to the coronavirus uncertainty, we expect RBI to take pre-emptive measure anytime soon or at April's MPC policy and cut repo rate. If the virus spreads further very rapidly then we can expect a deeper cut of 50 bps by RBI," Gupta said.
The NSO data further showed that inflation was 10.37 per cent in rural India and 11.51 per cent in the urban areas. In both cases, the rate of price rise was lower than January.