Pushed up by a steep rise in vegetable and fruit prices, the rate of growth of retail inflation inched up to 7.96 per cent in July. The moderation in prices witnessed in June did not hold up in the month of July.
June’s retail inflation at 7.46 per cent (revised from the initial 7.31 per cent) was the lowest in 29 months. But this could have been a temporary respite as the downward trend reversed in July, according to official data on the Consumer Price Index released on Tuesday.
The renewed trend of price-rise was seen even as the Modi government launched a multi-pronged attack to cool food prices in the month of July, including export curbs and a move to make hoarding a non-bailable offence. The Modi government has declared price control a top priority.
The increase in vegetable prices was nearly double that of the previous month, rising 16.88 per cent against 8.73 per cent in June. Fruits prices rose 22.48 per cent in July against 20.64 per cent in the previous month. Price increase in milk & dairy products, condiments, spices and sugar too rose during the month.
All eyes would now be on the rainfall data as depending on the spread of the monsoon, a clearer picture would emerge by September-October on the exact impact on crop output and the consequences for the availability of supplies.
Some improvement was seen in July with higher rainfall reducing the deficit from 44 per cent to 18 per cent as of August 6. The progress and distribution of rainfall, however, remains uneven.
