Inflation numbers for March were expected to be on the higher side but at nearly 9% year-on-year, the rise in the?Wholesale Price Index (WPI) is well beyond the comfort zone of citizens, firms and the central bank alike. Inflation now poses the single biggest danger to the economy.
While the price rise in primary articles slowed a bit to 13% from 14.8% in February, non-food inflation galloped to 7% y-o-y. This needs stronger monetary medicine than has been spooned so far.
The WPI number for January has been revised upward from 8.2% to 9.4% y-o-y—as clear a hint as any that February and March figures, too, may see upward revisions. This is in contrast to government pronouncements that inflation will fall soon.
The systemic underplaying of inflation has led to a perverse policy of inaction on part of the government. That will only cause more pain.