Improved outlook

Higher food grain production will help in managing inflation

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After persistently remaining elevated for a prolonged period, pressures of food inflation in India have eased significantly on account of increased agricultural output. The data released on Wednesday showed that the consumer price index-based inflation rate declined to 3.61 per cent in February, the lowest since July last year. Meanwhile, the food inflation rate softened to 3.75 per cent, the lowest since May 2023. The food inflation rate has been softening since October last year, when it rose sharply to 10.87 per cent. A higher food inflation rate was driving the headline inflation rate for quite some time, creating policy complications for the Reserve Bank of India (RBI). The rate will likely remain moderate for some time.