Economic Survey 2015: CPI inflation seen in the 5 to 5.5% range

NEW DELHI: Stating that inflation shows a declining trend in the year 2014-2015, the Economic Survey said that the Consumer Price Index (CPI) inflation will be in the range of 5-5.5%.

"There has been a decline in inflation by over 6 percentage points since late 2013. We see inflation beating RBI aim by 0.5-1 percentage points," the survey said.

Retail inflation, which guides central bank policy, rose 5.11% in January based on a revamped CPI, below the consensus estimate and slower than RBI’s March target of 6%. RBI governor Raghuram Rajan kept rates unchanged at the February 3 monetary policy announcement after a surprise 25 basis point cut on January 15.

Inflation based on India’s wholesale price index (WPI) fell below last year’s level in January because of softer crude and commodities, boosting the case for interest rate cuts by the Reserve Bank of India to lift demand as some experts warned of deflation in manufactured products.

WPI inflation was at a negative 0.39% in January against 0.11% in the previous month, the second deflation in three months, data released by the ministry of commerce and industry showed on Monday. November inflation was revised down from zero to (-) 0.17%.