BUSINESS

Fall in food inflation to 7.33 % brings no cheer

Food inflation eased to 7.33 per cent for the week ended July 16 from 7.58 per cent in the previous week mainly driven by a fall in the prices of pulses even as other edibles such as fruits, vegetables, milk and protein-rich items continued to rule dearer.

Predictably, even as the WPI (Wholesale Price Index) based food inflation slipped to its lowest level in 20 months and appeared heartening on paper, the decline brought no cheer either for the government or the consumers at large. For, the prime reason for the decline is the statistical effect of a high base as food inflation during the like period last year was at a high of 18.56 per cent.

In the event, it is understandable that despite the marked moderation, it rendered no great comfort to Finance Minister Pranab Mukherjee owing to persisting inflationary pressures and the absence of a firm downward trend. “… there is still inflationary pressure [in the economy] … These weekly figures fluctuate mainly on the base [effect]. Therefore, they do not show any definitive trend...,” Mr. Mukherjee said while commenting on the WPI data.

During the week, although pulses were cheaper by 8 per cent on an annual basis, almost all other food articles turned more expensive. Onion prices surged 22.66 per cent while vegetables were dearer by 7.59 per cent. Alongside, prices of milk went up by 9.96 per cent, fruits by 13.90 per cent and potatoes by 10.55 per cent.

Headline inflation stood at 9.44 per cent in June, having remained above the 9 per cent mark since December last year.

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