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Updated: August 14, 2010 18:15 IST

Double digit food inflation matter of concern, says Pranab

PTI
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Mr. Pranab Mukherjee, Finance Minister,MOS Finanance ,Namo Narain Meena and Chairman, SBI, Mr. O. P. Bhatt (L) at a meeting with Chief Executives of Public Sector Banks in New Delhi on Saturday. Photo: Kamal Narang
BL Mr. Pranab Mukherjee, Finance Minister,MOS Finanance ,Namo Narain Meena and Chairman, SBI, Mr. O. P. Bhatt (L) at a meeting with Chief Executives of Public Sector Banks in New Delhi on Saturday. Photo: Kamal Narang

Finance Minister Pranab Mukherjee on Saturday expressed concern over rising prices as the food inflation, after a gap of two weeks, entered the double digits driven mainly by higher prices of essential items.

“Of course it (food inflating) is a concern,” he told reporters on the sidelines of a meeting with chiefs of PSU banks.

High food inflation, Mr. Mukherjee added, was also on account of “base effect”, which is the statistical impact of the level of prices in the corresponding period last year on the current inflation rate. With low base even the small rise in inflation appears large.

After remaining in single digit for two weeks, food inflation again shot up to double digits at 11.4 per cent for the week ended July 31.

Experts, however, felt that food prices would calm after the impact of monsoon became visible with the advent of kharif (summer) crop in the market.

Food inflation had surpassed 20 per cent mark towards the end of 2009.

Overall inflation, which also include variation in prices of manufactured goods, was 10.55 per cent in June.

The figures for July, which will be made public on Monday, many economists feel, would be higher.

Inflation, which was in the negative in June-August 2009, soared to 11.23 per cent in May 2010.

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