Food inflation surged to a four-week high of 8.55% for the week-ended May 14, amid costlier fruits, and protein-based items such as milk, egg, meat and fish increasing the risk of pushing overall inflation even further. Food inflation stood at 7.47% in the previous week.
Food prices are also set to rise next month following a possible hike in prices of diesel and LPG that will pinch household budgets even more, already pummelled by high prices of most goods.
Average inflation in 2010-11 was 9.43% — the highest in 16 years.
The government expects the average annual inflation for 2011-12 to be between 7.5% and 8% amid spiralling prices of vital commodities such as oil.
Inflation of non-food articles has been in the range of 20-25% over the past many weeks.
Both the government and Reserve Bank of India (RBI) have acknowledged that underlying inflationary pressures have accentuated, even as risks to growth are emerging.