Food inflation drops marginally, at 8.84 pc -Governance Now

Food inflation drops marginally, at 8.84 pc

However, prices of key commodities continue to be high

PTI | September 22, 2011

Food inflation in India fell to 8.84 per cent in the week ended September 10 from 9.47 per cent in the previous week, but provided no relief to the common man as prices of key commodities continued to rule high.

Prices of most commodities, barring wheat, continued to remain firm on an annual basis, as per wholesale price index (WPI) data released by the Indian government on Thursday.

According to experts, the fall in inflation on a weekly basis is on account of statistical reasons, called as "high base effect". Food inflation was above 16 per cent in the corresponding period last year.

As per the data, wheat prices during the week were down 2.72 per cent year-on-year.

However, onions became more expensive by 29 per cent and potatoes 13.78 per cent. Overall, vegetables became 12.13 per cent dearer.

Milk prices, too, were up by 10.38 per cent, while fruits grew dearer by 17.67 per cent and eggs, meat and fish prices rose by 9.28 per cent year-on-year.

Prices of cereals also went up, by 4.13 per cent, during the week under review. Even the prices of pulses, which had exhibited a declining trend during recent months, rose by 1.49 per cent during the week ended September 10.

Overall, inflation in primary articles stood at 12.17 per cent for the week ending September 10, compared to 13.04 per cent in the previous week. Primary articles constitute over 20 per cent of the WPI basket.

Non-food articles, which include fibres, oil seeds and minerals, recorded 17.42 per cent inflation during the week ended September 10, up from 18.49 per cent in the previous week, ended September 3.

Meanwhile, inflation in the fuel and power segment went up to 13.96 per cent during the week ended September 10 from 13.01 per cent in the previous seven-day period.

Experts are of the view that despite the latest fall, pressure on the food price front will continue to keep the government and the Reserve Bank on their toes.

Headline inflation, which factors in manufactured items, fuels and non-food primary items, in addition to food commodities, stood at a 13-month high of 9.78 per cent in August.

The Reserve Bank has already hiked policy rates 12 times since March, 2010, to tame demand and curb inflation.

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