Food inflation eases to 9.47% for week ended September 3

New Delhi, Sep 15 (PTI) Food inflation in India declined
marginally but was still high at 9.47 per cent for the week
ended September 3, with prices of all items, barring pulses
and wheat, rising on an annual basis.
Food inflation, as measured on the basis of the Wholesale
Price Index (WPI), stood at 9.55 per cent in the previous
week. The rate of price rise of food items was 15.16 per cent
in the corresponding week of 2010.
As per data released by the government Thursday, prices
of pulses fell by 2.45 per cent year-on-year, while wheat
became cheaper by 2.03 per cent during the week ended
September 3.
However, other food items became more expensive during
the week under review.
Onions grew dearer by 42.98 per cent on an annual basis,
while potato prices were up 21.16 per cent.
Furthermore, fruits became 22.64 per cent more expensive
during the week ended September 3 and overall, prices of
vegetables shot up by 17.47 per cent.
In addition, milk became 10.02 per cent costlier, while
the rates for cereals were up by 5.02 per cent during the
seven-day period under review.
The fall in food inflation could be attributed to a
moderation in the rate of price rise of some of the items on
a week-on-week basis, even though they remained higher on an
annual basis.
The decline could also be attributed to the high
inflation of over 15 per cent in the corresponding year-ago
period, a phenomenon dubbed the 'high base effect' in economic
parlance.
Overall, inflation in primary articles was recorded at
13.04 per cent during the week ended September 3, down from
13.34 per cent in the previous week. Primary articles account
for over 20 per cent of wholesale price index inflation.
Inflation in non-food articles, which include fibres,
oilseeds and minerals, stood at 18.49 per cent during the week
under review, compared to 19.88 per cent in the previous week.
Meanwhile, fuel and power inflation went up to 13.01 per
cent from 12.55 per cent in the previous week.
Food inflation has been hovering near the double-digit
mark since July-end and even went above 10 per cent for a week
in mid-August.
Earlier this month, the government banned onion exports
to curb rising prices of the product, which have shot up from
Rs 15 per kilo to Rs 25 per kilo in the national capital
during the past few weeks.
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 11 times
since March, 2010, to tame demand and curb inflation.
However, inflation continues to remain high and in
addition, the country's economic growth has seen a drastic
slowdown, which some have attributed to the rising cost of
credit.
Industrial production fell to a 21-month low of 3.3 per
cent in July. Economic growth in the April-June period stood
at 7.7 per cent, the lowest in six quarters.
This has put the central bank, which is scheduled to
conduct its mid-quarterly review of the monetary policy
tomorrow, in a dilemma over whether to continue with its
hawkish policy stance to tackle inflation, or pause on its
monetary tightening strategy with a view to get the country's
growth back on track.