High prices of vegetables and manufactured items drove the headline inflation in March to 8.98 percent, way above the RBI’s expectation of 8 percent.

The overall inflation measured on the basis of Wholesale Price Index (WPI) was 8.31 percent in February.

The rise in overall inflation for the second month in a row may prompt the central bank to go for another round of policy rate hikes in its policy review meeting, scheduled for 3rd May.

As per the official data released on Friday, the high inflation was on account of rising prices of manufactured items, milk, vegetable and fruits.

In addition, high fuel costs due to spiralling international crude oil prices also contributed to the phenomenon.

Besides, food inflation, which accounts for nearly 15 percent of overall WPI inflation, stood at 8.28 percent for the week ended 2nd April.

The prices of primary articles — food, non-food articles and minerals — shot up by 12.96 percent on an annual basis, according to the official data released on Friday.

Food articles grew expensive by 9.47 percent, cereals by 3.96 percent and, rice and wheat by 2.69 percent and 0.75 percent, respectively.

However, the speed at which pulses price rose eased to 4.17 percent on an annual basis.

During the month, fuel and power prices went up by 12.92 percent, driven mainly by a 23.14 percent rise in petrol prices and a 14.99 percent jump in cooking gas (LPG) rates.

At the same time, the manufactured goods group index rose by 6.21 percent on an annual basis. Manufactured items have the highest weight of 64.9 percent in the WPI.

The WPI inflation for January was revised upwards to 9.35 percent from the provisional estimates of 8.23 percent.