Under control

• April saw 69-month low retail and 13-month low wholesale inflation, indicating continued price easing.

• This is a relief for both the public and policymakers, confirming the control of last year’s inflation levels and the RBI’s right to cut interest rates twice in a row.

• The fall in retail inflation was primarily due to a contraction of nearly 11% in vegetable prices and 5.2% in the price of pulses.

• The wholesale level inflation also decreased due to easing vegetable prices, which contracted 18.26% in April.

• The government’s efforts to bolster buffer stocks of essential food items, conduct open market releases, and ease imports during supply shortages have helped in easing inflation.

• The trajectory of retail inflation for the rest of the year will be influenced by the monsoon, tariff uncertainty, and threats of retaliation by India.

• The latest inflation data may encourage the RBI’s Monetary Policy Committee to cut interest rates again in June.

• Public sector oil marketing companies should cut fuel prices in line with crude oil inflation in the WPI, as the policy is deemed a sham.