Food inflation at 9.13%; Finance Minister calls situation grave

NEW DELHI: Rising prices of essential kitchen items like potato and pulses pushed food inflation closer to the double-digit mark at 9.13 per cent for the week ended September 17, a development which Finance Minister Pranab Mukherjee termed as "grave".

"(Food inflation)... is perilously close to double digits. These fluctuations are taking place and it is one of the areas of grave concern," Mukherjee told reporters here.

Food inflation, as measured by the Wholesale Price Index (WPI), was 8.84 per cent in the previous reporting week.

As per the Commerce Ministry data, prices of onions eased marginally, while gram, masoor, arhar, urad and poultry rates firmed up, on an annual basis.

"Food prices are an area of major and grave concern," Mukherjee said.

As per the WPI data, inflation in eggs, meat and fish eased to 13.17 per cent during the week as against 28.7 per cent, year-on-year. While onion prices was down to 17 per cent from 22 per cent last year, potato prices rose 15 per cent.

Experts said the food inflation may decline only later this year.

"We hope that inflation number will come down during November-December period due to a larger base effect," Standard Chartered Bank Senior Economist Anubhuti Sahay said.

KASSA India Director Siddharth Shankar said, "Global slowdown and RBI's tight monetary policy will keep a cap on the non-food inflation numbers."

Non-food articles, which include fibres, oil seeds and minerals, recorded an inflation of 12.89 per cent during the week ended September 17, down from 17.42 per cent in the previous week.