MUMBAI (Reuters) - India's annual consumer inflation accelerated to 5.11 percent in January from 4.28 percent a month ago, after New Delhi shifted to a new base year for calculating prices, government data showed on Thursday.
The country's statistics department has started using 2012 as the new base in place of 2010 for measuring retail prices. It has lowered weighting for food and fuel items in the revamped price index.
COMMENTARY
SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI
"A key message from a policy perspective is that the disinflation momentum seems to be intact.
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"We continue to believe there would be some headroom to cut rates further 50 basis points in 2015."
JYOTINDER KAUR, PRINCIPAL ECONOMIST, HDFC BANK, NEW DELHI
"The headline number has surprised on the downside. Going by the current pace of inflation, this should mean a significant undershooting of the RBI's target for both March 2015 and January 2016. All this data is re-assuring, as we were of the opinion that space exists for more monetary easing.
"While there was some degree of confusion over the RBI's response to the new GDP series, we believe that we should expect another 75 bps cuts over the remainder of the calendar year.
"Whether RBI will revise the target now will be a tricky question, but it will simply mean entering into an unnecessary disinflationary path.
"As RBI has already mentioned, the 4 percent target is not a medium target and this number in conjunction with the low capacity utilisation and low pricing power should mean that there is some slack in the economy.
"Just because inflation is trending lower doesn't mean it's time to reduce targets.
"On the IIP we aren't completely surprised and it's a fairly boring reading compared to the CPI. But it is perhaps somewhat of a counter balance to the euphoria built around the new GDP reading."
INDRANIL PAN, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"Under the new series the difference in inflation between January and December is higher than in the old series, which means the pick up in inflation was faster in January.
"But it won't be right to compare the new series with RBI's inflation target of 6 percent based on the old series. Given the way inflation is lower under new series compared to the old series, RBI should now bring down its inflation target to 5 percent by March 2015."
(Reporting by Suvashree Dey Choudhury and Swati Bhat; Editing by Rafael Nam)