New Delhi, May 14: India's annual rate of inflation, based on monthly Wholesale Price Index (WPI), for the month of April 2012 surged to 7.23% on-year as compared to 6.89% recorded in March, as prices of food items including vegetables, potato, milk rose significantly, the data released by Ministry of Commerce & Industry showed Monday.  

However, inflation in April was significantly better that 9.74% recorded in corresponding month last year. 

After the 13 policy rate hikes since March 2010, the Reserve Bank of India (RBI) changed its stance and started easing liquidity pressure by cutting the CRR by 50 and 75 basis points in a month period. Meanwhile, India's industrial growth continued trend southward in 2012, as after registering 6.8% on-year growth in January and 4.1% on-year growth in February it contracted further to -3.5% as compared to March last year. 

Amid declining industrial growth and surge in food inflation, RBI cut the repo rate by 50 basis points from 8.5% to 8.0% in April.   

The inflation in primary article category, with weight-age of 20.12% in WPI, in April surged 9.71% on-year as compared to 9.62% recorded in March. It was at 15.09% in same month last fiscal.  Food inflation, after remaining in negative in January, surged to 6.07% in February and continued to move upward to record 9.94% in March and touched double digit of 10.49% in April. In the corresponding month last year it was at 10.66%.   Non-Food inflation in April,after remaining in negative (-1.20%) in March surged to 1.61%. In the corresponding month last year it was at 26.86%.  Fuel and power inflation in the reporting month also surged to 11.03% over the same period last year. In March it was at 10.41%.

Inflation in manufacturing product, with weightage of 64.97% in WPI, surged to 5.12% in April over the same period last year. In March it was at 4.87%.  

With industrial growth slowing and prevailing global sentiment, it would be a challenge for the central bank to keep growth-inflation dynamics in balance.