Moderation in the prices of pulses, wheat and vegetables
NEW DELHI: In what the government on Thursday sought to describe as “a declining trend”, food inflation eased further to its 18-month low at 7.47 per cent for the week ended May 7 from 7.70 per cent in the previous week following a moderation in the prices of pulses, wheat and vegetables.
Considering that food inflation, as measured by the wholesale price index (WPI), around the like week last year was at a high of over 22 per cent, the government may have reason to derive some satisfaction. Economic analysts, however, warned against any complacency, especially as the price spiral in non-food items continues to rule at higher levels to provide no comfort to the Reserve Bank of India (RBI) to ease on its hawkish policy stance.
Commenting on the WPI data, Finance Minister Pranab Mukherjee said: “Both on food inflation and overall wholesale price index (WPI), there is a declining trend”. Pointing out that inflation had come down in all three segments — primary articles, food and non-food items — he was, however, quick to add: “I do not give much credibility to weekly fluctuations or monthly fluctuations. We shall have to take an overall view”. For a major part of 2010, food inflation had remained in double digits and signs of moderation were visible only from March this year. In view of this statistical effect, prices of pulses eased by 8.87 per cent during the week on a year-on-year basis. Likewise, vegetables and wheat also turned cheaper by 3.61 per cent and 0.06 per cent, respectively. However, as pointed out by the RBI in its annual monetary policy review, it is the core (non-food) inflation that remains a matter of concern and which is why overall inflation is projected to remain at near 9 per cent during the first-half of the fiscal year before easing to around 6 per cent.
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