Food inflation drops sharply to 1.81 percent

December 22nd, 2011 - 5:10 pm ICT by IANS  

Pranab Mukherjee New Delhi, Dec 22 (IANS) India’s annual food inflation fell sharply to 1.81 percent for the week ended Dec 10 as compared to 4.35 percent in the previous week and almost 11 percent a month and a half back, as vegetables, onion, potato, wheat and other essential commodities became cheaper, official data showed Thursday.

This is the lowest level of food inflation in almost four years. Food inflation was recorded at 13.22 percent in the corresponding week of 2010.

Prices of vegetables declined by 26.37 percent during the week under review year-on-year, according to data released by the commerce and industry ministry.

Onion became cheaper by 49.38 percent and price of potato slumped by 34.39 percent. Wheat became cheaper by 4.21 percent.

Food inflation came in single digit in the second week of November and has dropped consistently since then. It was recorded at 10.63 percent for the week ended Nov 5.

In the last one and half months food inflation has dropped sharply, giving the much needed respite to the economic policy makers who had been struggling for the last two years to control the price rise.

Inflation in overall primary articles, which has 20.12 percent weight in the wholesale price index, dropped to 3.78 percent for the week ended Dec 10 as compared to 5.48 percent in the previous week.

However, fuel inflation continues to remain high keeping the overall inflation at an elevated level. Fuel inflation remained unchanged at 15.24 percent.

The headline inflation based on the wholesale price index was recorded at 9.11 percent in November, according to the latest official data.

Finance Minister Pranab Mukherjee recently said that despite the recent moderation, overall inflation still remained at an unacceptable level.

The Reserve Bank of India last week kept policy rates unchanged after hiking the key rates 13 times ina row since the beginning of 2010.

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

Onions: (-) 49.38 percent

Vegetables: (-) 26.37 percent

Fruits: 8.89 percent

Potatoes: (-) 34.39 percent

Eggs, meat, fish: 9.25 percent

Cereals: 1.68 percent

Rice: 1.46 percent

Wheat: (-) 4.21 percent

Pulses: 14.22 percent

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