Higher food prices accelerated India's May retail inflation to 3.05 per cent from 2.99 per cent in April, official data showed on Wednesday.

However, on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in May 2019 was lower than the corresponding period of last year when retail inflation stood at 4.87 per cent.

April retail inflation had risen to 2.92 per cent from 2.86 per cent in March, official data showed on Monday.

However, on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in April 2019 was lower than the corresponding period of last year when retail inflation stood at 4.58 per cent.

The Reserve Bank of India (RBI) on Thursday lowered the repo rate for commercial banks by 25 basis points (bps) to 5.75 per cent, the lowest in the past nine years.

"A sharp slowdown in investment activity along with continuing moderation in private consumption growth is a matter of concern. The headline inflation trajectory remains below the target mandated to the MPC even after taking into account the expected transmission of the past two policy rate cuts," the policy statement said.

"Hence, there is scope for the MPC to accommodate growth concerns by supporting efforts to boost aggregate demand, and in particular, reinvigorate private investment activity, while remaining consistent with its flexible inflation targeting mandate," it said.