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India's Food Inflation Rate Back To Single-Digit

posted Nov 24, 2011, 4:54 AM by Puneet Goyal
(RTTNews) - After hovering in double-digit for the last five weeks, India's annual food inflation rate for the week ended November 12 dropped and returned to single digit to 9.01 percent, on lower prices of milk, egg, fish, fruits, rice, wheat, potato and onion.

Annual inflation rate of food article prices, as measured by the wholesale price index, or WPI, (with base year 2004-05) for the week ended November 12 declined to 9.01 percent from 10.63 in the preceding week.
Percentage of inflation in the corresponding week in the preceding year was 11.38 percent.
The 52-week average inflation for the week ended November 12 was 10.54 percent, according to data released by the Ministry of Commerce & Industry.
Annual percentage of inflation for 'Non-Food Articles' drastically fell to 4.05 percent from 5.33 in the preceding week. The 52-week average inflation for the week ended November 12 was 20.57 percent.

Primary articles
Annual rate of inflation for the week ended November 12 was 9.08 percent, down from last week's level of 10.39 percent. It was 15.18 percent for the corresponding week of the preceding year. The 52-week average inflation for the week was 13.66 percent, the data revealed.

Index for this group, with a weightage of 20.12 percent, declined by 0.54 percent from the previous week's level.

These groups and items showed variations:-
The index for 'Food Articles' group dropped by 0.65 percent from the previous week. The items for which the index showed decline were chicken, bajra, fruits and vegetables, condiments and spices, urad, maize and moong. However, the prices of masur, coffee, tea, ragi, wheat and gram moved up.
Index for 'Non-Food Articles' was down by 0.68 percent, on lower prices of raw rubber, gaurseed, sunflower, raw cotton, mesta, copra, coir fibre and castorseed, while those of flowers, fodder, gingellyseed, raw silk, raw jute and mustardseed increased.
Index for 'Minerals' group rose by 0.42 percent due to higher prices of crude petroluem.

Fuel & Power
Annual rate of inflation for the week ended November 12 remained unchanged at its previous week's level of 15.49 percent. The 52-week average inflation for the week was 12.70 percent, the data showed.
Index for this major group carrying a weightage of 14.91 was unchanged at its previous week's level of 171.5.
The decline in in food prices is likely to bring some relief to the government and the Reserve Bank of India (RBI), which have been getting flak from all quarters for persisting high prices.

The government had said steps were being taken to remove the supply bottlenecks and expected prices to ease from December.

Finance Minister Pranab Mukherjee said the government's immediate priority was to contain price-rise.

"A particular area of continuing concern has been persistently high food inflation," Mukherjee said, adding that although policy action had helped contain inflation, it was still above the comfort level.

"High inflation and also some of the effort to control liquidity has a detrimental effect on short-run growth. The immediate priority is to control inflation so that long-term growth prospects are not affected," he said on Wednesday in a written reply in the Rajya Sabha (Upper House of Parliament).

RBI Governor Duvvuri Subba Rao said monetary steps might be warranted to curb inflation expectations in face of sustained high food inflation, flagging the need to revisit politically sensitive subsidy schemes in agriculture.

He also said the government's food for work program and proposed food subsidy bill would further raise fiscal deficit and inflationary pressures.

Food inflation has been stubbornly high over the last few years in India, in spite of record food grain production and robust buffer stocks.

The apex bank has hiked interest rates 13 times since March, 2010, to control inflation, which has hurt industrial output.

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