Mumbai: The monsoon rains, which have been deficient by about 21 percent this season, are likely to spur prices of food and non-food articles, economic think tank CMIE said.
“We expect the South-West monsoon to remain deficient and the major crop production to decline by 2.3 percent. This decline in output of major crops is expected to add to the already high inflation seen in food articles,” the Centre for Monitoring Indian Economy (CMIE) has said in its monthly report.
The inflation is likely to go up in food articles like cereals, pulses, oilseeds and vegetables.
“We expect the food inflation at 9.7 percent during 2012-13, against our previous projection of 9.1 percent,” it said.
During the June-August period, the rainfall was deficient by 21 percent.
Major states that grow kharif crops like Gujarat, Rajasthan, Karnataka, parts of Maharashtra, west Uttar Pradesh received deficient rainfall even in July leading to decline in acreage of major crops by 10 percent, it said.
Meanwhile, international commodity prices are expected to rise on account of the drought-like situation in the US and combined with the depreciating rupee, imports are likely to push up domestic food inflation.
It further said, the non-food inflation is also expected to go up on account of rising prices of oilseeds, it said.
Inflation in coal and electricity index is likely to remain high in 2012-13, it said.