High inflation may moderate in 2013
The RBI, however, has indicated that in view of the likelihood of inflation moderating further, it could go in for a rate cut in its third quarter policy review in January.
"In view of inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onwards," the RBI said in mid-quarter policy review on December 18.
The WPI inflation in November stood at 7.24 per cent. During 2012, the highest rate of price rise was witnessed in August when inflation stood at 8.01 per cent.
The decline in inflation could be attributed to fall in prices of manufactured products, primary articles and power. Inflation, however, increased in crude petroleum, non-food articles, cereals, protein foods, edible oils, beverages and tobacco products.
Rise in food items has been a major source of high inflation mainly on account of persistent supply constraints in many protein items.
The government attributed persistent inflation to higher international crude prices, change in dietary pattern and revision in MSP on some of the essential commodities.
The government in the Budget undertook a number of measures like augmenting supply and improving storage and warehousing facility.
The Centre anticipates the RBI would adopt an accommodative monetary policy as inflationary pressures arising out of excess demand would ease.
The government expects inflation to moderate during the January-March