India's food inflation inching to 18 per cent | business | Hindustan Times
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India's food inflation inching to 18 per cent

business Updated: Feb 11, 2010 16:29 IST

Even as Prime Minister Manmohan Singh stressed last week that the worst was over on rising prices of essential items, India's annual food inflation based on wholesale prices rose to 17.94 per cent for the week ended Jan 30.

The annual rise in the index for food articles was 17.56 per cent for the week before, as per official data released by the commerce and industry ministry on Thursday.

Prices of essential items continued to rise in the country, with vegetables dearer by 20.93 per cent, potatoes by 40.57 per cent, pulses by 41.24 per cent and fruits by 8.67 per cent during the 52-week period.

The limited data on wholesale price index further showed a sharp rise in the index for primary articles by 15.75 per cent, while that for fuels was up 10.44 per cent.

India's overall inflation rate, based on the wholesale prices index, had risen sharply to 7.31 per cent in December from 4.78 per cent the previous month mainly on account of higher food prices. The complete statistics for January are expected Friday.

While addressing a conference of chief ministers on how to curb prices here last week, the prime minister said although the war on prices had only met with partial success, the worst was over on curbing India's annual food inflation.

"While we did well to protect incomes, we have been less successful on food prices," the prime minister told the conference, adding: "Let me say, in the end, that I believe the worst is over as far as food inflation is concerned."

In fact, fearing inflationary expectations in the economy, the central bank had changed its monetary policy stand late last month from an accommodative regime to a strict vigil on monetary expansion in a bid to bring down prices.

The Reserve Bank of India (RBI) also sharply raised its projected annual inflation rate at the end of this fiscal to 8.5 per cent from the 6.5 per cent that was predicted in the previous monetary policy update three months ago.

"Though the inflationary pressures in the domestic economy stem predominantly from the supply side, the consolidating recovery increases the risks of these pressures spilling over into a wider inflationary process," RBI Governor D. Subbarao said.

The price rise of some essential food items over the 52-week period:

- Potatoes: 40.57 per cent

- Pulses: 41.24 per cent

- Cereals: 12.15 per cent

- Rice: 9.90 per cent

- Milk: 14.16 per cent

- Wheat: 15.47 per cent

- Vegetables: 20.93 per cent

- Fruits: 8.67 per cent