New Delhi: Inflation based on wholesale and retail price indices will rise on average by 2.7 per cent and 4.9 per cent during the next fiscal, India Ratings and Research projected on Wednesday.

"Notwithstanding the benign retail and wholesale price forecast for 2016-17, Ind-Ra believes the inflationary challenge is far from over as food prices have more than often triggered surprises," the agency's Chief Economist Devendra Pant said in a statement. As regards RBI's policy stance, Pant said the central bank is likely to be accommodative in the near term. "If conditions permit, Ind-Ra expects a 0.25-0.50 per cent cut in the repo rate during 2016-17," he said.