Food inflation rages on; Pranab concerned

Despite the Reserve Bank of India hiking policy rates as many as 12 times in 18 months, the food inflation in the country shows no signs of being curbed, a fact that Finance Minister finds to be “a matter of concern”. Food inflation as measured by Wholesale Price Index (WPI), rose to 9.41 per cent for the week ended September 24 from 9.13 per cent in the previous week on the back of costlier vegetables, fruits, milk and protein-based items.

As per data from the Ministry of Commerce, vegetables became dearer by 14.88 per cent year-on-year during the week under review, while potatoes and onions grew more expensive by 9.34 per cent and 10.58 per cent, respectively.

Fruit prices went up by 11.72 per cent, while milk was up 10.35 per cent and eggs, meat and fish became 10.33 per cent more expensive.

Cereals became dearer by 4.57 per cent and pulses were up 7.54 per cent on an annual basis during the seven-day period.

"Inflation is definitely a matter of concern. We shall have to see how to bring it down to a moderate level. I am constantly in touch with the RBI," Finance Minister Pranab Mukherjee said in New Delhi.
The monsoon was normal this year and the government had earlier exuded hope this would bring down food prices.

Overall, inflation in primary articles stood at 10.84 per cent during the week under review, compared to 11.43 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI.
Inflation in non-food articles, which comprise fibres, oil seeds and minerals, stood at 10.77 per cent for the week ended September 24, as against 12.89 per cent in the previous week.

Meanwhile, inflation in the fuel and power segment was flat at 14.69 per cent, the same as in the previous week.

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.