Moderating prices of vegetables and some cereals pulled down food inflation to 10.39 per cent at the end of the third week of February.
Chief Economic Advisor Kaushik Basu said the food inflation rate was still at an unacceptably high level and cautioned against any panic reaction as it could result in higher interest rates that could retard industrial growth.
Food inflation fell by 1.10 percentage points during the week ended Febuary 19 from 11.49 per cent a week ago as vegetable prices rose by 14.29 per cent against 15.89 per cent. Prices of both potatoes and onions declined by 12.66 per cent and 3.64 per cent respectively during the week. Wheat prices also fell by 2.06 per cent. Prices of protein-based products like egg, meat, fish and milk declined during the week compared to the previous week.
“With growth recovering, we can now put our focus on controlling inflation,” said Planning Commission Deputy Chairman Montek Singh Ahluwalia. Fuel and energy prices remained steady at 12.56 per cent, but is likely to go up if global prices continue to rise due to the crisis in West Asia.