After declining for four consecutive months, WPI-based inflation increased marginally in February to 6.84 per cent from 6.6 per cent last month.

The marginal rise in wholesale price index (WPI)-based inflation — the main gauge for inflation in India — can largely be attributed to fuel price acceleration on a year-ago basis.

With diesel prices expected to go up further by about 50 paise a litre from Friday, there are doubts over the Reserve Bank of India going in for any aggressive cuts in policy rates on March 19. A 25-basis-point cut is the most we can expect, say bankers and analysts.

Fuel, power and lubricants saw a 10.5 per cent jump in February against 7.1 per cent in January.

Fuel price inflation ticked up with a sharp acceleration in LPG prices and higher diesel, which drove the rise in the headline rate, according to Moody’s Analytics.

Inflation among primary articles cooled to 0.7 per cent year-on-year from 10.3 per cent in January.

Food price inflation eased to 11.4 per cent from 11.9 per cent. The price of cereals (19.2 per cent), rice (18.8 per cent), wheat (21.6 per cent) and vegetables (12.1 per cent) all jumped sharply.

Food price inflation held fairly steady, while the rise in prices of manufactured goods, which best represents core inflation in India, continued to trend steadily lower, Moody’s Analytics said in a report on India’s WPI print for February 2013.

On Thursday, the Government also revised upward the December inflation rate to 7.31 per cent from 7.18 per cent earlier.

srivatskr@thehindu.co.in

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