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Adding to the Government's woes, food inflation shot up for the second straight week, driven mainly by vegetables, fruits, milk products and poultry items, while fuel inflation also surged marginally. The Finance Minister, Mr Pranab Mukherjee, expressed “grave concern” and assured of steps to moderate the surging inflation trend.
The annual food inflation, based on the Wholesale Price Index, rose 17.05 per cent for the week ended January 22, up from the 15.57 per cent reported in the previous week. The fuel price index climbed 11.61 per cent, up from 10.87 per cent in the previous week, according to the Government data.
More Monetary action
The surge in food and fuel inflation puts pressure on headline inflation, reinforcing expectations of more monetary action in the coming months to subdue inflationary expectations.
“Price rise, especially involving food items, is a matter of grave concern”, Mr Mukherjee told reporters here on being asked about the rising inflation trend. He said efforts are being made both from the demand and supply side to moderate it.
While analysts expect vegetable prices to moderate in the coming weeks, the inflationary trend in case of protein-based food items such as milk, fish and egg are expected to remain firm for some time. According to the latest data, the Primary Articles price index was up 18.44 per cent in the latest week, compared with an annual rise of 17.26 per cent a week ago.
Onions surge
Among vegetables, inflation in the case of onions increased 130.41 per cent during the latest reported week. Vegetables were up 77.05 per cent on an annual basis followed by fruits (15.47 per cent), egg, meat and fish (15.05 per cent), milk (11.41 per cent) and potatoes (6.22 per cent). On a sequential basis, onions gained 6.5 per cent while petrol surged more than 4.5 per cent.
Headline inflation had accelerated in December to 8.43 per cent after food inflation reached a one-year high of above 18 per cent in late December. That prompted the Reserve Bank of India, to revise its end-March inflation projection to 7 per cent from 5.5 per cent ago.
According to analysts, the central bank may go in for yet another hike in its mid-quarter monetary policy review next month. The review is scheduled for March 16.
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