Inflation based on wholesale prices inched up to 2.93 percent in February over the previous month on account of firming up of prices of food items, including vegetables and cereals, according to government data released on Thursday.
The Wholesale Price Index (WPI)-based inflation was at 2.74 for the same month last year and at 2.76 percent in January this year.
As per data released earlier this week, the retail inflation based on Consumer Price Index rose to 2.57 percent in February, which is a four-month high, due to costlier food articles. Retail inflation is factored in by the RBI while deciding key interest rates.
The WPI data further revealed that wholesale-based price inflation in the food basket was 4.28 percent in February, against 2.34 percent recorded in the previous month.
According to the latest WPI data, in the case of cereal, paddy, wheat, pulses, vegetables, fruits and other protein-rich kitchen essentials such as egg, meat, and fish, inflation was higher on a monthly basis. However, in the case of milk, the data revealed that the rate of price rise in February was slower.
As per CARE Ratings' analysis on WPI data, the inflation in the economy has started moving up from the trough it reached last month, both at retail and wholesale levels.
The wholesale inflation in the fuel and power segment was also higher at 2.23 percent, compared with 1.85 percent recorded in January.
Meanwhile, the WPI for December 2018 has been revised downwards at 3.46 percent as compared to a provisional estimate of 3.8 percent.
"The rise in wholesale inflation can be ascribed to increase in primary articles viz food and non-food articles...The build-up inflation so far (April 2018-Feb 2019) was 2.75 percent, higher than the 2.56 percent registered in the corresponding period last year," it said.
The Reserve Bank, which mainly factors in retail inflation based Consumer Price Index (CPI), had cut the key lending rate by 0.25 percent in February.
In April, the Reserve Bank of India's (RBI) Monetary Policy Committee will be meeting for the first bi-monthly monetary policy, for the further review of the next fiscal. This will be a nessesary stance especially at the time of slowing growth rate of industrial production and inching up inflation.
(With PTI Inputs)