Inspite of unexpected rains and damages to crops, inflation has started easing. The CPI based inflation eased to 5.17% in March 2015 as compared to February 2015 and January 2015 which was 5.37% and 5.19% respectively. It was 8.25% in march 2014. This inflation is lowest in the last quarter of 2014-15.Food inflation also eases and came down to 6.14% in march 2015 as against 6.88% in feb 2015 and 8.64% in march 2014. Such ease in inflation is mostly due to rate cut by RBI two times in the last quarter @.25 basic points each. In the last policy announcement of RBI on 7th April, RBI kept the key rates unchanged though many organizatoins were expecting further cut.According to the monetary policy frame work, RBI has set a target of 6% by January 2016. Further, for 2016-17 and subsequent years, the target is 4% (+ or -2%).
In addition to reduction in retail price index another good news is that shole sale price index is also coming down. For march 2015 it was – 2.33% and for februrary it was -2.06. since last five months whole sale price index is continuosly decreasing. Amongst vegetables, this year potato is selling at lowest price since last 3 years and prices of onion and tomato are in normal ranges. However fruits are little costlier as compared to last year. Same is the position of sugar prices of which are very low. The expected impact of unseasonal rains would be the reflected in April/May 2015 as actual assessment of loss of damages is still going on. However, if the present trend in inflation continues for few months more, it would be a great relief to common man of the country.