Low inflation blues may taper off in the second half of FY18

Fall in prices in May worrisome for farmers because this may discourage them to grow pulses

Retail price inflation, whose rate fell to the lowest level in May in accordance with the new series, has an upside risk in the second half of the financial year owing to a likely revision in house rent allowances for government employees and an expected rise in the fiscal deficit of the states that are giving a farm debt waiver.

It may touch 4-5.5 per cent in those six months.

The reduction of the consumer price index (CPI) rate to 2.18 per cent in May, close to the floor agreed upon by the government and RBI, may not be as worrisome as