Consumer price-based inflation jumped to 6.95 per cent in March from 6.07 per cent in February, mainly on account of costlier food items, according to government data released on Tuesday.
The inflation in the food basket was 7.68 per cent in March, up from 5.85 per cent in the preceding month.
This is the third consecutive month in which inflation has remained above the 6 per cent upper bound of the Reserve Bank of India's (RBI) mandate, averaging 6.4 per cent in January-March.
RBI, which mainly factors in the retail inflation while arriving at its bi-monthly monetary policy, has been tasked by the government to keep the inflation between 2 and 6 per cent.
The sharp increase in CPI inflation in March was driven by an increase in prices across all but one of the major groups of the basket, with only the index of the housing component of the CPI declining on a month-on-month basis.
RBI kept policy rates unchanged in its latest monetary policy review but indicated that inflation will be a priority over growth. The RBI has revised upwards its inflation projection to 5.7% from 4.5% earlier
The GDP growth forecast was revised to 7.2 per cent for FY23 from 7.8 per cent projected during the February meeting.