India wholesale price index based inflation rises to 6.95% in February

New Delhi, Mar 14 (PTI) Relief from rising prices remained short-lived as inflation, after declining for five months, inched up again to 6.95 per cent in February on costlier pulses and vegetables which may refrain the country's central bank RBI from effecting any cut in the lending rates at its monetary policy review tomorrow. Finance Minister Pranab Mukherjee, however, took comfort from marginal decline in rate of price rise of manufactured goods and expressed hope that inflation may soften to 6.5 per cent by March. "... inflationary pressure is there... We will end the year with around 6.5 per cent (inflation)...," Mukherjee said. Inflation, as measured by the Wholesale Price Index (WPI), was 6.55 per cent in January. In February last year, it was 9.54 per cent. Inflation in food articles accelerated on an annual basis in February to 6.07 per cent. It was (-) 0.52 per cent in January, as per official data. Food articles have 14.3 per cent share in the WPI basket. Although the government was hopeful that inflation would decline to 6 per cent by March end, the latest figures show that it would continue to hover above the projected level and would necessitate fiscal steps to combat price rise. Mukherjee may announce steps to contain price rise in the Budget 2012-13, to be presented in Parliament on March 16. Experts said the Reserve Bank of India will hold on to the policy rates in its mid-quarterly policy review meeting tomorrow as it has already injected a Rupees 480.0 billion (about USD 9.6 billion) liquidity last week by reducing the Cash Reserve Ratio (CRR) for banks. Prices of manufactured items, which have a weight of 64.97 per cent in the WPI basket, went up by 5.75 per cent year-on-year in February, as against 6.49 per cent in the previous month. Inflation in the fuel and power segment, with a weight of 14.91 per cent in WPI, was 12.83 per cent on an annual basis. The rate of price rise was 14.21 per cent in the previous month. PTI