Retail inflation moderated slightly to 7.8 per cent in August from 7.96 per cent in July on the softening of the prices of vegetables and fuels. Food inflation finally showed signs of coming under control, remaining flat at 9.4 per cent. However, it remained higher than the June level of 7.97 per cent, according to official data released here on Friday.
The Modi Government has taken a series of steps to control food inflation, including a move to make hoarding a non-bailable offence.
The rate of price rise in vegetables climbed down to 15.15 per cent in August against 16.88 per cent in July. Inflation in cereals moderated marginally from 7.5 per cent to 7.4 per cent. The rate of inflation for the category ‘fuel and light’ declined somewhat to 4.15 per cent from 4.47 per cent.
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However, prices of fruits rose at the rate of 24.27 per cent.
The rate of inflation in fruits was lower at 22.5 per cent in July. Sugar prices increased at the rate of 1.2 per cent in August as against 0.8 per cent in July.
Retail inflation in pulses too increased from 5.9 per cent to 6.9 per cent. It increased in milk and milk products to 11.70 per cent from 11.3 per cent.
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Inflation in the proteins group — eggs, fish and meat — in which inflation has been persistently sticky over the past few years remained unchanged at 7.71 per cent.
Going forward, while global crude prices are softening somewhat, the possibility of inflation remaining high as a result of lower kharif output remains a concern though there has been a revival in monsoons that has reduced the deficit.
The area under cultivation this year is marginally lower than that last year. Crops, including coarse cereals, pulses, sugarcane and oilseeds have lower acreage, which can have an impact on output and hence prices.