Higher food prices push inflation to 9.73 percent

November 14th, 2011 - 8:22 pm ICT by IANS  

Pranab Mukherjee New Delhi, Nov 14 (IANS) A rise in prices of food articles, notably lentils, rice, milk, condiments, fruits and vegetables marginally pushed India’s annual rate of inflation to 9.73 percent for October from 9.72 percent in the previous month.

The headline inflation based on the wholesale price index has remained stubbornly high, above 9 percent for the 11th consecutive month, despite aggressive monetary tightening by the Reserve Bank of India.

According to latest data on the wholesale price index released by the commerce ministry, the rise was spread across commodity groups. Primary articles registered an inflation rate of 11.4 percent, fuels were up 14.79 percent and factory goods 7.66 percent.

“For seven months, from April to October, the main reason for high inflation is food inflation. There has been a substantial increase food price,” Finance Minister Pranab Mukherjee said while reacting to the monthly data.

Food inflation was recorded at 11.81 percent for the week ended Oct 29.

Mukherjee said food prices were likely to moderate due to good monsoon.

“I do hope that the full impact of the good monsoon will be felt and steps we have taken to improve the supply side will yield results,” the finance minister said.

The high inflation rate has been a cause for concern both for the Reserve Bank of India and the government, with Prime Minister Manmohan Singh terming it a “worrisome” problem. “I do not deny it particularly with regard to food prices,” he said last week.

“Foodgrain prices are stable. But the prices of vegetables and that of tertiary goods are going up. The demand is growing on a much faster rate on the supply curve. “One reason why inflation has become a problem is due to the prices of fuel products,” the prime minister said.

The stubbornly high inflation leaves little room for the RBI to ease its monetary policy stance, as demanded by India Inc in view of the slumping growth.

India’s industrial output slumped to two year low of 1.9 percent in September. India Inc has blamed the rising cost of capital for the recent slump in industrial and overall growth.

The RBI has increased its key policy rates 13 times since the beginning of 2010.

Following is the inflation rate for key commodities for October, as per latest data:

* Food Articles 11.06

* Cereals 4.56

* Rice 4.56

* Wheat (-)0.95

* Pulses 9.63

* Vegetables 21.76

* Potato 1.30

* Onion (-)16.16

* Fruits 11.96

* Milk 11.12

* Eggs, Meat and Fish 12.59

* Non-Food Articles 17.71

* Fuel and Power 14.79

* Liquefied petroleum gas 14.27

* Petrol 27.90

* High speed diesel 9.32

* Manufactyured Products 7.66

* Food Products 7.80

* Sugar 6.69

* Edible Oils 13.09

* Beverages, Tobacco and Tobacco Products 12.53

* Cotton Textiles 10.80

* Man-made Textiles 7.17

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