Wholesale prices climbed 2.47 percent year-over-year in March, nearly in line with February's 2.48 percent increase.
It revised downwards its forecast for retail inflation, to 4.7-5.1 percent for the April-September period and 4.4 percent for the October-March period.
Two of the nine Monetary Policy Committee (MPC) members already voted to hike rates to 0.75 per cent last month, marking the first split vote since last November when rates were raised from 0.25 per cent to 0.5 per cent.
As per the official government data released Monday, food articles showed deflation at 0.29 per cent in March as against a 0.88 per cent inflation in the preceding month.
Index of primary articles in WPI declined by 0.5% to 127.4 (provisional) from 128 (provisional) for the previous month. Deflation in pulses was 20.58 per cent, in vegetables (2.70 per cent), wheat (1.19 per cent) and egg, meat and fish (0.82 per cent) in March. However, the price of raw silk (7%), mesta and hides (raw) (5% each), sunflower (4%), soyabean (3%), fodder (2%) and raw wool, coir fibre and raw rubber (1% each) moved up.
The index for "Minerals" group declined by 2% to 119.7 (provisional) from 122.2 (provisional) for the previous month due to lower price of copper concentrate (14%) and phosphorite (1%). However, the price of iron ore (15%), chromite (13%), manganese ore (6%), limestone (5%) and zinc concentrate and lead concentrate (1% each) moved up. The index for fuel and power (weight 13.15 per cent) also declined by 0.1 per cent to 98.0 from 98.1 for the previous month due to lower price of LPG, naphtha, HSD, bitumen, petrol and furnace oil.
The primary articles hold weightage of 22.62% in WPI.
The index for this major group declined by 0.1% to 98 (provisional) from 98.1 (provisional) for the previous month.
As per CSO data, inflation in the vegetables segment cooled to 11.7 per cent in March from 17.57 per cent in the previous month. This index holds 64.23% of WPI.
Moreover, the retail inflation eased to 4.28 per cent, a five-month low in March, but remained above RBI's medium-term target, supporting views that monetary policy is likely to remain unchanged at the next review in early June.
Inflation data for January was revised upwards to 3.02 percent from the provisional estimate of 2.84 percent.