Food inflation soars to 17.05 pc, FM gravely concerned

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New Delhi: Providing no respite to the common man, food inflation rose to 17.05 percent for the week ended January 22, as Finance Minister Pranab Mukherjee expressed “grave concern” and assured steps to moderate it.

Driven by higher prices of vegetable, fruits and eggs, food inflation increased for the second week in a row, soaring by 1.48 percentage points from 15.57 percent in the previous week.

“Price rise always, particularly, the commodity price and food items are matter of grave concern” Mukherjee told reporters when asked to comment on the rising inflation.

Mukherjee said efforts were being made both from the demand and supply side to moderate it.

Food inflation had stood at 20.56 percent during the same period a year ago.

Although the vegetable prices are likely to moderate in the coming weeks, protein-based food items like milk, fish and eggs are expected to remain firm.

“Real stubborn components are the fiber items, milk, egg and fish. We need to improve production, storage facility and processing,” Crisil’s Principal Economist D. K. Joshi said.

Inflation in “Fuel and Power” segment showed an increase of 11.61 percent year-on-year, following an increase of petrol prices by Rs. 2.50 per liter in January.

Among vegetables, onion prices on annual basis rose by 130.41 percent in the third week of January, although they have moderated considerably in the recent days.

Vegetables as a whole became dearer by 77.05 percent on an annual basis followed by fruits (15.47 percent), eggs, meat and fish (15.05 percent), milk (11.41 percent) and potato (6.22 percent).

The uptick in latest food inflation figure is likely to put further pressure on the government to provide relief to the common man in the coming Budget.

Both the government and the Reserve Bank have been grappling with high inflation and slowing industrial growth that dipped to the 18-month low of 2.7 percent for November.

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