Food inflation in double-digits for second straight week

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Prices of pulses, vegetables and milk shot up during the week ending on October 15, taking India's food inflation to 11.43 per cent from 10.6 in the week before, official data showed on Thursday.

This is the second consecutive week that food inflation has stayed in double digit levels.

The soaring food inflation comes even as the Reserve Bank of India (RBI) hiked key interest rates for the 13th straight time Tuesday. The central bank and the government led by Prime Minister Manmohan Singh, however, have maintained that they expected inflation to fall from December.

Overall inflation has remained stubbornly high near double-digit since January 2010. The headline inflation based on the wholesale price index was recorded at 9.72 per cent in September, according to latest official data.

"Inflation rate will begin falling in December 2011 and then continue down a steady path to 7 per cent by March 2012. It is expected to moderate further in the first half of 2012-13," RBI Governor Duvvuri Subbarao had said while reading out the second quarter monetary policy review.

Subbarao said for food inflation to ease on a sustainable basis, the government needed to step in and removed infrastructure bottlenecks and accelerate reforms in the agriculture and allied sectors.

In the week under review, the primary articles index, which has a 20.12 per cent weight in the wholesale price index, rose by 11.75 per cent during the week under review as compared to 11.18 per cent in the previous week, according to data made available by the commerce and industry ministry.

The index of fuel and power declined marginally to 14.7 per cent.

During the week ended Oct 15, the index for non-food articles again showed a significant decline, growing at a slower rate of 7.67 per cent as compared to 8.51 per cent in the previous week.

The following are the yearly rise and fall in prices under review of some main commodities that form the sub-index for food articles:

Onions: (-) 18.93 per cent

Vegetables: 25 per cent

Fruits: 11.96 per cent

Potatoes: (-)0.45 per cent

Eggs, meat, fish: 12.82 per cent

Cereals: 4.62 per cent

Rice: 4.26 per cent

Wheat: (-) 0.95 per cent

Pulses: 9.06 per cent

If inflation comes down as projected by March, the central bank said it could focus on offering incentives for growth.