Slowing for the first time in 6 months, wholesale inflation for December came at 6.16 percent against 7.52 percent in November. From 5.85 percent in July to November, inflation had increased continuously. Retail inflation had also eased in December latest official data shows.
Vegetable prices inflation remained high at 57.3 percent even after witnessing a decline from the 95.3 percent rate of growth in November, according to official data released here on Wednesday. The steepest drop was in onion prices to 39.6 percent from 190.3 percent.
Pulses prices, however, dropped compared with a year ago. Growth in inflation in pulses prices came at -7.2 percent against +16.3% in December 2012.
Build up inflation rate from April to December is 5.35 percent compared to 4.84 percent in the corresponding period of the previous year, the release said.
“The good news is that the prices of cereals, fruits & vegetables, onions, eggs are trending downward after being on the ascendant for long.... Going forward, the good harvest should further help contain food prices,” Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said in a statement. That manufacturing prices are reasonably stable indicates core inflation is within range, which should induce the Reserve Bank to cut interest rates, the statement added. Manufactured products segment inflation moved down to 2.6 percent from 5.0 percent a year ago.
“To ensure that the easing of food prices is a sustained phenomenon, CII maintains that there is need for critical distribution reforms in agriculture and taking perishables out of APMC to improve the agriculture supply chain logistics and enable better price discovery,” the statement said. “Further, there is need for a clear plan and a strategy for using India’s excess stock of food and vegetables, much of which goes waste every year.”
