With the prices of certain essential items such as rice, milk, fruits and vegetables continuing to rule high, food inflation crept up further to 17.65 per cent for the week ended April 10 from 17.22 per cent in the previous week.

Fearing that the WPI (Wholesale Price Index)-based overall inflation — ruling at 9.9 per cent in March and well above its fiscal-end projection of 8.5 per cent — may shoot up further on account of the spill-over from food inflation, the Reserve Bank of India (RBI) on Tuesday this week hiked the key policy rates to squeeze money supply and get a hold on the price spiral. Analysts expect food inflation to soften on arrival of the rabi crop harvest in markets by the middle of next month and in case the Meteorological Department happens to forecast a normal monsoon in its initial projections to be unveiled on Friday. Clearly, while a good rabi harvest would moderate food inflation to a large extent, the deciding factor would be the monsoon as prospects of good rainfall would tend to douse overall inflationary expectations. On the contrary, if the pressure on food prices continues to persist, the overall inflation is certain to move up further, especially when manufactured products and fuel items are already witnessing price pressures.


Food inflation softening, says PranabApril 28, 2010

More In: Business | Economy