Retail inflation: India has recorded its lowest retail inflation rate since the onset of the Covid-19 pandemic, according to theMonthly Economic Review for March 2024 released by the Department of Economic Affairs. The government's concerted efforts in managing inflation during the fiscal year 2023-24 have yielded promising results, with the Consumer Price Index (CPI) declining from 6.7 per cent in the previous fiscal year to 5.4 per cent, the report said. This figure aligns well within the upper tolerance level of the inflation-targeting framework, showcasing a commendable achievement in inflation control.

March 2024 marked a notable milestone as retail inflation dipped to 4.85 per cent, the lowest rate recorded in the past ten months. Core inflation, excluding food, fuel, and light, also saw a decline, resting at 3.3 per cent in March, the lowest for the financial year. The miscellaneous group, indicative of services' price changes, followed suit, with inflation dropping to 3.5 per cent, also marking a ten-month low.

Of particular note is the fuel and light segment, which slid into negative territory in March, attributed to the reduction in petrol, diesel, and LPG prices. The government's proactive stance in this regard, including recent price cuts, has significantly contributed to inflation control. Measures such as a Rs. 100 reduction in non-subsidized LPG cylinder prices, effective March 9, 2024, and a Rs. 2 per litre reduction in petrol and diesel prices nationwide, effective March 15, 2024, are expected to further impact inflation in the coming months.

While India celebrates its success in curbing overall inflation, the global scenario remains challenging, particularly concerning food inflation. Major economies like Germany, Italy, South Africa, France, and the United Kingdom continue to grapple with high food prices, necessitating sustained efforts to alleviate food price pressures worldwide.

In India, food inflation witnessed a marginal decline from 8.7 per cent in February to 8.5 per cent in March. This persistent challenge is driven by specific food items, notably vegetables and pulses. The government has undertaken various measures to address this issue, including strengthening buffers for key food items, facilitating imports of essential food items, and imposing stock limits to prevent hoarding. 

Moreover, the upcoming monsoon season holds promise for further easing food prices, with the Indian Meteorological Department (IMD) predicting above-normal rainfall, which is anticipated to boost production assuming favorable spatial and temporal distribution.