Inflation In India Surges To 4.86 Percent

New Delhi, July 16, IRNA - Inflation surged to 4.86 percent in June, driven mainly by rising prices of food articles, especially vegetables. Inflation based on the Wholesale Price Index (WPI) stood at 4.70 percent in May. In June, 2012, it was 7.58 percent. As per official data released Monday, WPI inflation in the food articles category rose to 9.74 percent, driven mainly by price rise in onion, cereals and rice. The rate of price rise in food articles, which has a 14.34 percent share in the WPI basket, was 8.25 percent in May. Inflation in onion shot up by 114 pe cent in June, from 97.40 percent in the previous month. Vegetables prices too rose by 16.47 percent during the month, from 4.85 percent in May. It was (-)9.05 percent in April. Inflation in the manufactured items category, however, declined to 2.75 percent in June from 3.11 percent in May. The non-food articles category, which include fibre, oil seeds and minerals, saw a sharp rise in inflation to 7.57 percent, from 4.88 percent in May. Inflation for April was revised downwards to 4.77 percent from 4.89 percent as per provisional estimates. The inflation data would be closely watched by the Reserve Bank while formulating its first-quarter policy scheduled for July 30. There have been demands for lowering interest rate in the backdrop of declining inflation. While the Reserve Bank has lowered interest rates by 1.30 percent since January 2012, the banks have cut lending rates by only 0.30 percent. The data showed inflation in egg, meat and fish at 12.23 percent during June as compared to 11.21 percent in the previous month. Inflation in cereals and rice was high at 17.18 and 19.11 percent, against 16.01 and 18.48 percent, respectively, in May. Potatoes, however, saw decline in rate of price rise to (-)14.22 percent, from (-)3.44 percent in May. Pulses too declined sharply to 1.59 percent during June, from 5.95 percent in May. For the fuel and power category, it was lower at 7.12 percent in June as compared to 7.32 percent in the previous month. Data released last week showed retail inflation inching up to 9.87 percent in June, from 9.31 percent in the previous month, on costlier vegetables and food items./end