Food inflation down marginally to 8.96 pc

New Delhi (PTI) - In India, food inflation went
down marginally to 8.96 per cent for the week ended June 4 on
the back of cheaper pulses and vegetables.
Food inflation, as measured by the Wholesale Price Index
(WPI), stood at 9.01 per cent in the previous week, while it
was over 21 per cent in the first week of June last year.
The latest fall, although very marginal, is likely to be
seen as a silver lining by the government, which has been
battling the high rate of price rise across all segments for
the past few months and also had to contend with low economic
growth and factory output numbers in recent months.
Headline inflation in the country stood at 9.06 per cent
in May.
The Reserve Bank has already hiked its key policy rates
10 times since March, 2010, to tame demand and curb inflation.
The latest hike of 25 basis points in the short-term lending
(repo) and borrowing (reverse repo) rates was announced on
Thursday.
During the week under review, prices of pulses went down
by over 10 per cent year-on-year, while vegetables became
cheaper by 1.39 per cent.
However, prices of other food items continued to move
upward.
Fruits became almost 30 per cent more expensive, while
milk was up 10.59 per cent. Eggs, meat and fish became dearer
by 7.31 per cent on an annual basis.
The prices of onions went up by 12.17 per cent and
potatoes by 1.14 per cent. Cereals were also up by 5.25 per
cent.
Overall, inflation in primary articles stood at 12.86 per
cent during the week under review, up from 11.52 per cent in
the previous week. Primary articles have a share of 20 per
cent in the overall WPI basket.
Meanwhile, inflation in non-food primary articles stood
at 20.20 per cent during the week under review, a slight dip
from 20.97 per cent in the previous week.
Fibres became 53.54 per cent more expensive and minerals
were up 25.90 per cent. Fuel and power became dearer by 12.84
per cent and petrol was up 33.23 per cent.
Headline inflation has been above the 8 per cent mark
since January, 2010.
In its annual monetary policy for 2011-12 announced last
month, the Reserve Bank had said that inflationary pressure
will continue for the next few months on account of high
international commodity prices, particularly of crude.
It had said that headline inflation would be driven more
by commodities like oil in the near future, rather than high
food prices, as was the case during most of 2010.
The RBI had projected headline inflation to average 9 per
cent during the first half of the fiscal, before moderating to
around 6 per cent by March, 2012.
Food inflation was in double digits for most of last
year, before showing signs of moderation since March this
year. However, it had again breached the 9 per cent mark
during the last week of May after a gap of two months.
The government had to deal with a series of bad news
during recent weeks on the economic front. While January-March
economic growth stood at 7.8 per cent, the lowest in five
quarters, industrial output also slowed down to 6.3 per cent
in April.