India's annual food inflation has dipped to 16.23 percent for the week ended May 22 from 16.49 percent in the previous week, official data released on Thursday showed.
Data on the wholesale price index (WPI) released by the commerce and industry ministry showed that both food and non-food index have dropped 0.1 percent each during the week under review.
Fuel prices slowed 12.08 percent during the week against a 12.33 percent increase in the last week, whereas the primary articles index was up 15.9 percent, compared to a rise of 16.19 percent during the previous week.
Following are the rise and fall in prices of some essential food items over the 52-week period:
- Pulses: 33.14 percent
- Milk: 21.12 percent
- Fruits: 13.85 percent
- Rice: 7.27 percent
- Cereals: 5.88 percent
- Wheat: 4 percent
- Potatoes: (-)32.71 percent
- Onions : (-) 17.24 percent
The overall annual rate of inflation in April stood at 9.59 percent.
However, the drop in inflation levels has not been as fast as the government hoped and an international development agency said on Wednesday that high inflation was a problem and that the Reserve Bank of India needed to make more substantial policy rate hikes to contain it.
"With inflation remaining elevated and the recovery appearing to have taken root, there is a risk that price increases for inputs will flow through to second-round increases and that inflationary expectations will become destabilised," Organisation for Economic Cooperation and Development (OECD) said in a statement.
{{/usCountry}}"With inflation remaining elevated and the recovery appearing to have taken root, there is a risk that price increases for inputs will flow through to second-round increases and that inflationary expectations will become destabilised," Organisation for Economic Cooperation and Development (OECD) said in a statement.
{{/usCountry}}"To mitigate this risk, sizeable further monetary tightening will be required through 2010 and into 2011," it added.
The country is betting on a normal monsoon this year as over 60 percent of India's cultivable land are rain-fed. Prime Minister Singh, under attack from opposition parties for failing to check rising prices, recently pledged to almost halve the inflation rate by December this year.