Nayar said the rise in global crude petroleum and natural gas prices, as well as the recent depreciation of the rupee against the dollar, is likely to push the WPI inflation up in April.
The index for "food articles" group declined by 0.4 per cent to 137.2 from 137.8 for the previous month, despite a price rise in items like ragi, jowar, peas/chawali, moong and paddy, among others.
The overall prices have fallen, as food articles have turned cheaper in the last few months.
The harmonised CPI figure, calculated by NSI for comparison with European Union data, recorded a decrease of 0.2 per cent on a monthly basis, while the annual harmonised CPI in March showed a 1.9 per cent increase.
The inflation data for January was revised upwards to 3.02 per cent from the provisional estimate of 2.84 per cent.
The sub-category of manufactured food products became dearer by 0.31 per cent.
Product-wise, the price of high-speed diesel rose by 6.12 per cent during March while that of petrol climbed by 2.55 per cent and for LPG by (-) 9.08 per cent. This is different from the consumer price index-based inflation, which reflects price changes in the retail market.
However, on a year-on-year (YoY) basis, the consumer price index (CPI) last month stood higher than the 3.89 per cent reported in March 2017.
Food prices were 0.3 per cent lower compared to February and services prices shrank by 0.4 per cent, while non-food prices were down by 0.2 per cent.
"A significant decline in the inflation of food articles including cereals and pulses is an indicator that the government has rightly focused agriculture sector", Anil Khaitan, President, PHD Chamber was quoted as saying in a statement. The "market consensus" is for a 0.5 percent q/q rise in prices on Thursday - 0.1 percent lower than the central bank's forecast.
However, if the firmness in the core inflation at the retail level continues, it will soon begin to reflect at the wholesale level as well, Sinha said.
According to the data that the Ministry of Commerce & Industry released today, food articles showed deflation at 0.29 per cent in March as against a slight 0.88 per cent inflation in the preceding month.