Onions pile up more misery, food inflation spikes to 9.80%

New Delhi: Inching closer to the crucial double-digit mark, food inflation rose to 9.80 percent for the week ended August 13 on the back of dearer onions, potatoes, fruits and protein-based items.

Food inflation, as measured by Whole Price Index (WPI), stood at 9.03 percent in the previous week. The rate of price rise of food items in the corresponding week of August, 2010, was 14.56 percent.

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As per data released by the government on Thursday, the price of onions soared by 44.42 percent year-on-year while potatoes became 16.39 percent more expensive during the week under review.

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During the week ended August 13, fruits became dearer by 27.01 percent and eggs, meat and fish by 13.37 percent on an annual basis. The price of milk was up 9.51 percent, while vegetables and cereals became dearer by 6.52 percent and 5.22 percent, respectively.

However, pulses became cheaper by 5.56 percent and the price of wheat was down by 2.80 percent year-on-year. Overall, primary articles recorded 12.40 percent inflation for the week ended August 13, up from 11.64 percent in the previous week. Primary articles have a share of over 20 percent in the WPI.

Inflation in non-food articles, which include fibres, oil seeds and minerals, stood at 17.80 percent, compared to 16.07 percent in the previous week. Meanwhile, fuel and power inflation stood stable at 13.13 percent for the week ended August 13, the same as in the week ended August 6.

Seeking to allay concerns over the rate of price rise, Prime Minister Manmohan Singh had on Wednesday expressed confidence that headline inflation would come down to 6 percent by the year-end. “I am not an astrologer, but analysts have said that by the end of this year, inflation will come down to 6 percent,” Singh had said during an Iftar dinner hosted by him.

Headline inflation, which also factors in manufactured items, fuels and non-food primary items, besides food, stood at 9.22 percent in June. The Reserve Bank has already hiked interest rates 11 times since March, 2010, to tame demand and curb inflation.

The RBI and the Prime Minister’s Economic Advisory Council had projected headline inflation to remain high at around 9 percent till October. Food inflation was in double digits for most of 2010, but started to moderate from March this year.

PTI