High prices of vegetables and manufactured items drove the headline inflation in March to 8.98 per cent, way above the RBI's expectation of 8 per cent.
The overall inflation measured on the basis of Wholesale Price Index was 8.31 per cent in February.
The rise in overall inflation for the second month in a row may prompt the central bank to go for another round of policy rate hikes in its policy review meeting, scheduled for May 3.
As per the official data released on Friday, the high inflation was on account of rising prices of manufactured items, milk, vegetable and fruits.
In addition, high fuel costs due to spiralling international crude oil prices also contributed to the phenomenon.
Besides, food inflation, which accounts for nearly 15 per cent of overall WPI inflation, stood at 8.28 per cent for the week ended April 2.
The prices of primary articles -- food, non-food articles and minerals -- shot up by 12.96 per cent on an annual basis, according to the official data released on Friday.
Food articles grew expensive by 9.47 per cent, cereals by 3.96 per cent and, rice and wheat by 2.69 per cent and 0.75 per cent, respectively.
However, the speed at which pulses price rose eased to 4.17 per cent on an annual basis.
During the month, fuel and power prices went up by 12.92 per cent, driven mainly by a 23.14 per cent rise in petrol prices and a 14.99 per cent jump in cooking gas rates.
At the same time, the manufactured goods group index rose by 6.21 per cent on an annual basis. Manufactured items have the highest weight of 64.9 per cent in the WPI.
The WPI inflation for January was revised upwards to 9.35 per cent from the provisional estimates of 8.23
Food inflation at 8.28%: Food inflation fell to a year's low of 8.28 per cent for the week ended April 2 as prices of certain essential items, like pulses and wheat, declined.
This is the third consecutive week of decline in food inflation.
The figure was 9.18 per cent in the preceding week.
The lowest level of food inflation as seen in 2010 was on November 20 when it stood at 8.60 per cent.
During the week under review, prices of pulses fell by 4.76 per cent.
Also potato and wheat became cheaper by 2.73 and 1.05 per cent respectively on an annual basis, official data released here show.
However, other food items continued to exhibit an upward trend in terms of the rate of price rise.
Fruits became dearer by 24.14 per cent year-on-year, while eggs, meat and fish became 11.02 per cent more expensive during the week under review.
Milk was up by 4.05 per cent.
On an annual basis, cereals became dearer by 3.49 per cent, while rice and wheat were up by 2.20 per cent.
Vegetables were up by 5.41 per cent, led by onion whose prices went up by 7.74 per cent.
During the week under review, inflation in non-food articles was 26.77 per cent.
'Fibres' became dearer by 86.74 per cent, while fuel and power was up by 12.97 per cent.
