No relief in sight for common man! January retail inflation rises to near 6-yr high of 7.59%

Food prices, which is a gauge to measure changes in kitchen budgets, fell 13.63 percent, against a growth of 14.1 percent in December.

Vegetables inflation for January stood at 50.19 percent, against a 60.5 percent in December.

Inflation rate in cereals and products stood at 5.25 percent in January against 4.36 percent month ago.

Pulses and products recorded an inflation of 16.71 percent in January against 15.44 percent in December.

Prices of meat and fish came in at 10.5 percent in January against 9.5 percent month ago. Inflation in eggs was seen at 10.4 percent against 8.7 percent in December.

In the fuel and light category, inflation was seen at 3.66 percent.

"The internals of the food inflation are worrying, given a broad-based uptick across categories that tend to be sticky, such as proteins, and a narrower-than-expected reduction in the inflation for vegetables. Moreover, the fairly broad-based rise in the core inflation to 4.1 percent in January 2020, driven by various services, is a cause for concern," said Aditi Nayar, Principal economist, ICRA.

In its February policy review, the RBI left the repo rate unchanged and said that it would maintain the accommodative stance as long as necessary to revive growth, while ensuring that inflation remains within the target.

The RBI has revised CPI inflation projection upwards to 6.5 percent for the last quarter of 2019-20, 5.4-5 percent for first half of 2020-21, and 3.2 percent for third quarter of 2020-21, with risks broadly balanced.

The Budget, presented by Finance Minister Nirmala Sitharaman projected a nominal GDP growth of 10 percent in the next fiscal, followed by 12.6 percent and 12.8 percent in FY22 and FY23, respectively.

The government has pegged economic growth rate for 2019-20 at 5 percent, slower than the 2018-19 expansion rate of 6.8 percent.

India's GDP — the total value of goods and services produced in the country — slumped to over 6-year low of 5 percent in the April -June quarter and 4.5 percent in the July - September quarter of 2019.

The government estimated that gross value added (GVA), which is GDP minus net taxes, will grow at 4.9 percent in 2019-20.

GVA is a more realistic guide to measure changes in the aggregate value of goods and services produced in an economy.

According to the estimates, farm sector is set to grow at 2.8 percent against 2.9 percent last year, at constant or inflation-adjusted prices.