Friday, October 21, 2011

Back in Double Digit: Food Inflation at 10.6%

Food inflation clawed back into double digits in early October as pulses, vegetables, fruits, milk, egg, meat and fish turned costlier and economists said tackling supply side problems should be a top priority for the government. They said food inflation has averaged over 15% in the past two years and government should take urgent steps to shore up the supply side and cut down on wastage.

Data released by the commerce and industry ministry on Thursday showed food inflation stood at 10.6% in the week ended October 8, up from the previous week's 9.32%. It stood at 15.72% in the same year-ago period. "Even with good monsoon and crop, food inflation remains stubborn. Supply side needs attention and it is a big priority," said D K Joshi, chief economist at ratings agency Crisil.

Food inflation has remained stubborn for past several weeks and has hovered above the 9% mark, piling pressure on RBI. Overall inflation has also remained firm and moved around double digit levels despite the Reserve Bank of India's aggressive monetary policy.