India’s food inflation slips, breather for government

NEW DELHI - India’s annual food inflation for the week ended Jan 1 fell to 16.91 percent, compared to 18.32 percent in the previous week. The will come as a breather to the government, whose senior ministers have been conducting hectic meetings to curb the rise in food prices.

After five straight weeks of rise in food inflation rate, based on wholesale prices, the fall in the index was because of some tempering in prices of onions, from the peak of Rs.70 per kg. The prices of other essential commodities like pulses and food grains too came down, according to data made available by the commerce and industry ministry.

According to Thursday’s data, the 52-week inflation rate for non-food articles slipped to 20.49 percent for the week ended Jan 1, compared to 22.4 percent in the previous week.

The inflation rate for primary articles also dipped to 17.58 percent in the week under review, compared to 20.2 percent in the earlier week.

The index for fuels was almost unchanged at 11.53 percent, compared to 11.63 percent in the previous week.

The government is expected to announce measures to combat rising food prices Thursday. These include withdrawing some decisions like export of 500,000 tonnes of sugar and hiking the prices of wheat and rice sold through the public distribution system to families above the poverty line.

If these measure work and food inflation, which is feared to spread to non-food items as well, comes down then the Reserve Bank of India will not be forced to raise key interest rates — a major worry of India Inc.

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

Onions: 70.7 percent

Vegetables: 70.73 percent

Fruits: 17.71 percent

Potatoes: (-)1.67 percent

Milk: 13.2 percent

Eggs, meat, fish: 16.7 percent

Cereals: (-)0.12 percent

Rice: 1.34 percent

Wheat: (-)4.87 percent

Pulses: (-)14.84 percent