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Food prices rise again at 17.40%
New Delhi, Jan 28 (Agencies):
Published on 29 Jan. 2010 1:21 AM IST
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High prices continue to take a toll on the common man with the latest data showing that the food inflation moving northwards after falling for three consecutive weeks. The food price index rose 17.40 percent in the 12 months to January 16, data released on Thursday showed. The fuel index was also up 5.70 percent. Potato prices rose as much as 57.56 percent over the last year, followed by prices of pulses which jumped by 46.87 percent. The inflation for primary articles, which include food and non-food items, stood at 14.66 percent in the reporting week. On weekly basis, the price index for food articles rose by 0.4 percent on account of higher prices of egg (6 percent) and fruit and vegetables (1 percent). The wholesale price-based food inflation was 16.81 percent in the previous week. Notably, the wholesale inflation rose to 7.31 percent in December 2009, compared with 4.78 percent rise in November and 6.15 percent a year ago. The high inflation figures are a major worry for the Reserve Bank of India as it will decide the monetary policy tomorrow. Pronab Sen, chief statistician of India and secretary, Ministry of Statistics and Programme Implementation, had cautioned that inflation could well go over 9 percent by March end “unless something dramatic happens on agri prices”. Wholesale price-based inflation, which dipped to sub-zero levels following the impact of the global crisis, has started firming up and rose to 7.3 percent in December, 2009. The RBI will have to take a view on policy rates and ratios in its monetary review as the food inflation has become a matter of concern, mainly driven by higher prices of essential commodities like pulses, potato, onion and other vegetables. Food inflation had climbed to a decade’s high of around 20 percent in the first fortnight of December but has started sliding now and was at 16.81 percent for week ended January 9. War on prices: Centre to bypass states With food prices remaining at very high levels, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the Cabinet will take more steps to tame prices. The government is considering allocation of more food grains as food inflation remains a matter of concern, he said in an interview with Shweta Rajpal Kohli in Davos, Switzerland. The annual rate of food inflation increased to 17.4 per cent for the week ended January 16 as compared to 16.81 per cent in the previous week. The numbers are clearly above the comfort levels of the RBI which will announce its credit policy tomorrow. The wholesale price index, the measure of overall inflationary trends, rose 7.31 per cent from a year earlier in December, exceeding the RBI’s target of inflation at 6.5 per cent by the end of March. The rise in inflation is being primarily caused by a spurt in food prices as supply constraints caused by the drought continue to put pressure on food supply. On the overall economy, he said that the recovery in the economy remains strong, not ‘fragile’.

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