India's inflation based on wholesale price index declines marginally in March

New Delhi, Apr 16 (PTI) Inflation based on official wholesale price index fell marginally to 6.89 per cent in March but prices of essential items like pulses, potato and milk remained "disturbingly" high. It had stood at 6.95 per cent in February. It was 9.68 per cent a year ago. "...food inflation in the month of March has increased, which is disturbing factor. I do hope in course of time it will moderate," India's Finance Minister Pranab Mukherjee told reporters. As per the Wholesale Price Index (WPI), inflation of food items rose sharply to 9.94 per cent in March, as against 6.07 per cent in February. Food articles have 14.3 per cent share in the WPI basket. Vegetable prices in March shot up to 30.57 per cent, from 1.52 per cent in February. However, inflation of the manufactured goods showed some moderation to 4.87 per cent, from 5.75 per cent in February. Experts attributed easing in the manufacturing sector inflation to high base of last year, when it was 7.45 per cent in March 2011. "Notwithstanding concerns related to suppressed inflation and elevated global crude oil prices, the country's central bank RBI is expected to reduce the repo rate and CRR by 25 basis points each in its upcoming policy review, ICRA Economist Aditi Nayar said. Inflation remained high for most part of 2011, and RBI had hiked interest rates 13 times to tame the price rise. Making more money available for lending, the central bank has already cut the CRR, the portion of deposits banks have to keep with the Reserve Bank, by 125 basis points since late January to 4.75 per cent. The challenge before RBI is to arrest the decline in growth, which slipped to a three-year low of 6.9 per cent in 2011-12. The government expects the GDP growth to accelerate to 7.6 per cent in 2012-13, although the Asian Development Bank (ADB) has pegged it at 7 per cent. PTI