Food inflation falls to 39-month low of 6.6 percent

December 8th, 2011 - 8:22 pm ICT by IANS  

New Delhi, Dec 8 (IANS) India’s annual food inflation fell sharply to 6.60 percent for the week ended Nov 26, the lowest in nearly three-and-a-half years, as onion, potato, vegetables and wheat became cheaper, official data showed Thursday.

The food inflation has been dropping in the last one month. It was at 8 percent in the previous week ended Nov 19 and above 12 percent in October. Food inflation was at 8.93 percent in the corresponding week of last year.

The decline in food inflation would give the much needed relief to common people and the policymakers who have been struggling for almost the last two years to control the general price rise.

It will also bolster the case for reversing the Reserve Bank of India’s tight monetary policy. The RBI has hiked key policy rates 13 times since the beginning of 2010 to control price rise.

Onion became cheaper by 39.20 percent during the week under review, while price of potatoes declined by 15.75 percent. Wheat became cheaper by 4.70 percent year-on-year and price of vegetables dropped by 1.25 percent, according to data released by the commerce and industry ministry.

The primary articles index, which has a 20.12 percent weightage in the wholesale price index, dropped to 6.92 percent for the week under review as compared to 7.74 percent in the previous week. It was at 10.39 percent for the week ended Nov 5.

The fuel and power index remained unchanged at 15.53 percent.

The headline inflation based on the wholesale price index was recorded at 9.73 percent in October, according to the latest official data.

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: (-) 39.20 percent

Vegetables: (-) 1.25 percent

Fruits: 10.72 percent

Potatoes: (-) 15.72 percent

Eggs, meat, fish: 10.04 percent

Cereals: 1.68 percent

Rice: 2.34 percent

Wheat: (-) 4.70 percent

Pulses: 13.00 percent

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