BUSINESS

Inflation inches up on higher food prices

Special Correspondent

NEW DELHI: The rate of inflation, despite hovering around a 30-year low, inched up to 0.26 per cent for the week ended April 11 from 0.18 per cent in the previous week on higher prices of essential food items such as vegetables, cereals, pulses and certain manufactured products.

During the week, the WPI inflation — at the same level as prevalent at the end March 2009 — was at eight per cent for the like week in the previous year.

The marginal upward pressure on inflation by way of an eight basis point rise in the Wholesale Price Index (WPI) has been mainly owing to the higher minimum support prices of primary food articles coupled with lower production of pulses and coarse cereals. For instance, although certain varieties of pulses were cheaper by 0.3 per cent as compared to the previous week, they were 9.81 per cent dearer on a year-on-year basis.

Unveiling its annual monetary and credit policy on Tuesday, the Reserve Bank of India had also observed that food prices were still ruling high. WPI inflation, the apex bank said, was expected to be in negative territory in the early part of this fiscal but that should not be dubbed as deflation as it would not reflect demand contraction.

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