New Delhi: India’s wholesale prices fell more than estimated in January after consumer inflation unexpectedly accelerated, complicating the job of policy makers before Prime Minister Narendra Modi’s government presents its budget on 29 February.

Wholesale prices fell 0.9% in January from a year earlier, the commerce ministry said in a statement on Monday, compared with a 0.73% decline the previous month. The median of 30 estimates in a Bloomberg News survey had predicted a 0.13% decrease. Consumer prices had increased at the fastest pace since August 2014.

Reserve Bank of India (RBI) governor Raghuram Rajan, who uses CPI as a benchmark, kept interest rates unchanged this month and said he’d watch inflation and the budget before adding to four rate cuts last year. While profligate spending risks stoking inflation, government advisers have pointed to declining producer prices to seek lower borrowing costs.

The 5.69% increase in CPI was led by a 43% surge in pulses, a key ingredient in many Indian recipes.

Rajan is looking to hit a 5% consumer-price inflation target for March 2017. He said on Saturday that a certain amount of depreciation in the rupee is needed until inflation is brought down. Bloomberg