India’s inflation crosses 8% mark

Driven by increase in prices of onions, fruits and milk, food inflation for the week ended July 23 again soared to cross the 8 per cent mark after a brief period of moderation even as Indian Finance Minister Pranab Mukherjee said efforts are on to bring it down to 5 per cent.The spurt in food inflation to 8.04 per cent from a 20-month low of 7.33 per cent for the week ended July 16 is mainly driven by rise in prices of onions, fruits and milk, the Wholesale Price Index (WPI) data released on Thursday stated.The rate of price rise of food items was 16.27 per cent in the corresponding week of July 2010. Replying to a debate on price rise in Parliament, Mukherjee said efforts were on to bring down the food inflation to a comfortable level of around 5 per cent.“Food inflation should be around 5 per cent which will be comfortable 6-7 per cent can be tolerated but surely not 8 per cent,” he said. While international commodity prices and mismatch between supply and demand is pushing up inflation, experts said that below normal monsoon could further aggravate the situation.The data showed onions became dearer by 26.36 per cent year-on-year and fruits were expensive by 15.97 per cent during the week under review. Milk prices went up by 10.26 per cent, while vegetables were expensive by 10.20 per cent on an annual basis. Besides, cereal prices were up by 5.13 per cent, potatoes by 7.85 per cent, and egg, meat and fish by 6.66 per cent.The latest numbers also mark a resurgence of food inflation after a two-week long declining trend when the rate of price rise had fallen below the 8 per cent mark.Economists said that the Indian Meteorological Department’s (IMD) latest monsoon forcast is a cause of concern and is likely to renew the price pressure.On Wednesday, IMD had forcast that rainfall for India as a whole during August-September is likely to be 90% of Long Period Average and could affect farm output in some parts. “Any slippage in the monsoon could affect food inflation numbers, specially in case of vegetables, fruits and such other items,” Crisil Chief Economist D K Joshi said.Overall, primary articles recorded inflation of 10.99 per cent for the week ended July 23, up from 10.49 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI.Inflation of non-food articles, which include fibres, oil seeds and minerals, however, fell to 15.60 per cent from 16.05 per cent in the previous week.Meanwhile, fuel and power inflation stood at 12.12 per cent, same as the previous week. “The 7.33 per cent food inflation in the previous week was very low and some increase was expected,” Deloitte, Haskin and Sells Director Anis Chakravarty said. From / Gulf Today