Even as the government machinery is firing all its cylinders in a late proactive measure to bring down onion prices, a sudden surge in food inflation to double digits at 12.13 per cent for the week ended December 11 has come as a fresh setback to its efforts in containing the price spiral. Although the WPI (Wholesale Price Index) based food inflation, as per the official data, has been inching up only marginally for a couple of weeks, the swift rise by 2.67 percentage points within a week from 9.46 per cent during the week ended December 4 to touch its six-week high has thrown all official calculations on the price front off gear. It was at 10.15 per cent for the week ended November 13.
Commenting on the surge yet again to double digits, Finance Minister Pranab Mukherjee said: “I am afraid there has been some upward movement of food items... of course, the weekly fluctuations take place and one of the reasons may be the high prices of onion, which [we already] have taken steps.''
The fact, however, remains that the latest WPI data does not capture the skyrocketing prices of onions to Rs.70-80 a kg, which will be reflected in the food inflation data for the week ended December 25 to be officially released after a fortnight. In effect, it will mean yet another surge and economic analysts apprehend yet another tinkering in its key rates by the Reserve Bank of India (RBI) during the third quarterly monetary policy review on January 25 next year. As if summing up the government's foremost concern for the present, Mr. Mukherjee said: “I am concerned about the inflation. That is one of the challenges at the macro-economic level...It is a struggling exercise that we are doing. Unfortunately, there has been an increase. It is contributed by some of the food items — onion, edible oil, milk, fruits and vegetables.”
Adding to rising onion prices, contributing further to the common man's woes were food items such as fruits, eggs, meat and fish, milk and vegetables which also turned dearer to severely impact the monthly food budget.
The WPI inflation data revealed that the annualised increase in prices of onions worked out to 33.48 per cent, fruits 20.15 per cent, eggs, meat and fish 19.35 per cent, vegetables 15.54 per cent and milk by 17.83 per cent. On a weekly basis also, onion prices were up 4.56 per cent.
Commenting on spurt in food inflation, Cabinet Secretary K. M. Chandrasekhar said, “The prices of onion must have impacted (inflation) to some extent. There is some increase in prices of milk in the last few weeks. So that must have impacted to some extent but we are on top of it.”
Continuing to battle against onion prices that touched Rs.70-80 a kg in the last few days, a Committee of Secretaries met on Thursday to take stock of the situation.