Food prices remained negative for the second consecutive week, falling to (-) 2.90 per cent for the week ended December 31, 2011. It was above 19 per cent in the corresponding week of 2010.
Riding on cheaper onions and potatoes, vegetables became 49.03 per cent cheaper during the week under review. Onions became cheaper by 74.77 per cent year-on-year, while potato prices were down by 31.97 per cent.
Experts believe that the decline in food inflation will be a major cue for the Reserve Bank of India to cut interest rates at its next quarterly monetary policy review later this month.
Protein-based items such as pulses, white milk, egg and meat became more expensive on an annual basis. Pulses were 14.72 per cent costlier, while milk grew dearer by 10.79 per cent. Egg, meat and fish prices were up 15.22 per cent. Fruits also became 9 per cent more expensive on an annual basis, while cereal prices were up 2.03 per cent. Fuel and power inflation stood at 14.45 per cent during the week under review against 14.60 per cent in the previous week.
Inflation in the overall primary articles category stood at 0.51 per cent for the period, against 0.10 per cent in the previous week.
Expressing satisfaction over the fall in food prices, the Finance Minister, Mr Pranab Mukherjee, maintained that headline inflation should be between 6 and 7 per cent by end March 2012.
“Food inflation is still negative... There is a declining trend... If this trend continues, then the overall inflation will be manageable,” he told reporters here.