India’s retail inflation surged to 7.79 per cent in April, largely driven by rising fuel and food prices, government data showed. The consumer price-based inflation figure stayed well above the Reserve Bank of India’s (RBI’s) upper tolerance limit for the fourth consecutive month. In April, the CPI inflation expanded at its highest pace in eight years. The previous high was recorded at 8.33 per cent in May 2014. April’s print was higher than 6.95 per cent in March and 4.23 per cent a year ago.
Why does this happen?
- The rate of price rise in ‘fuel and light’ category in the retail inflation basket quickened to 10.80 per cent in April this year from 7.52 per cent in the preceding month.
- In the ‘oils and fats’ category, inflation remained at an elevated level of 17.28 per cent in April as Ukraine is one of the major sunflower oil producers in the world and India imports a major portion of the commodity from the war-ravaged country. Besides this, Ukraine is also a key supplier of fertiliser to India.
- Vegetables witnessed an inflation print of 15.41 per cent during the month as against 11.64 per cent in March.
- The Reserve Bank has been mandated by the Centre to keep the retail inflation between 2 per cent to 6 per cent.