The marginal respite from soaring prices proved short-lived as food inflation surged yet again to 19.83 per cent for the week ended December 19 on account of basic commodities such as potatoes, onions and pulses turning more expensive.
It was only in the previous week ended December 12 that food price inflation had eased somewhat to 18.65 per cent from the decade’s high of 19.95 per cent a week earlier. With no sign of any sustained relief, it is clear that the common man will have to bear the brunt of high prices for some more time in to the New Year.
During 2009, potato prices have more than doubled while pulses — hitherto the poor man’s protein supplement — turned dearer by over 41 per cent as compared to the previous year while onion prices also surged by more than 40.75 per cent. Besides these essentials, the prices of rice rose by 12.95 per cent, wheat by 12.66 per cent, milk by 13.61 per cent and fruits by 10.35 per cent on an annual basis.
Alongside, with the likely contraction in cereals output owing to the erratic monsoon leading to drought and floods in various regions yet to have its adverse effect on supply side management, the common man may have to combat higher food prices in the coming months.
Economic analysts are of the view that the overall inflation is likely to overshoot the Reserve Bank’s estimate of 6.5 per cent for the current fiscal.
According to Prime Minister’s Economic Advisory Council Chairman C. Rangarajan, headline inflation could be close to seven per cent by the end of March 2010 and the apex bank may have to take measures to rein in the price spiral.