India’s inflation falls to 3-year low at 5.96 percent

New Delhi, April 15 (IANS) India’s wholesale price based inflation fell below six percent for the first time in more than three years as prices of manufactured and primary articles eased, government data showed Monday.

Inflation based on Wholesale Price Index (WPI) fell to 5.96 percent in March, the lowest level since November 2009.

The headline inflation was recorded at 6.84 percent in the previous month and 7.69 percent during the corresponding month of last year, according to data released by the ministry of commerce and industry.

Manufactured products inflation that has 64.97 weight in the WPI index eased to 4.07 percent in the last month of fiscal 2012-13 as compared to 5.16 percent recorded during the corresponding month of previous year.

Primary articles based inflation eased to 7.6 percent in March 2013 as compared to 10.41 percent in the corresponding month of last year.

“The softening of headline WPI inflation to a three-year low can mainly be attributed to cooling down of primary articles (particularly food) inflation,” said Bhupali Gursale, an economist at Angel Broking.

Food inflation fell to 8.73 percent during the month under review as compared to 10.11 percent in the corresponding month of last year.

Core inflation has also inched lower to 3.4 percent in March reflecting the decline in commodity prices on a year-on-year basis as well as weak pricing power.

“Owing to the positive trend in inflation, we believe there is scope for a 25 basis points rate cut in the RBI’s annual policy May 3. But we maintain some caution in reading this data due to the upward revisions in the provisional numbers,” Gursale said.

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