Inflation as measured by the Wholesale Price Index was 4.17% in February and 2.51% in January.
The higher wholesale inflation is expected to cause a rise in retail inflation as well, dampening prospects of any rate cut soon. Consumer inflation had risen to 5.5% in March from 5% in the month before. This is near the top of the Reserve Bank of India’s 2-6% target inflation rate band.
“There is negligible space for rate cuts to support growth, in spite of the growing uncertainty related to the surge in Covid-19 cases, localised restrictions and emerging concerns regarding migrants returning to the hinterland,” said Aditi Nayar, chief economist,