The rate of wholesale food inflation declined for the fifth consecutive week, to 10.3 per cent, in the week ended November 6, mainly due to a fall in the prices of rice, pulses and perishables like vegetables and milk.
Food inflation, as measured by the Wholesale Price Index, has been moderating on account of increased supplies and also because of the high statistical base effect of last year. It had stood at 13.99 per cent during the corresponding week in 2009 and at 12.3 per cent in the previous week ended October 30, 2010.
The decline in food inflation throughout October had brought down the overall index marginally during the month; the continuing moderation may result in inflation settling down near the Reserve Bank of India’s projection of 6 per cent by the end of the current financial year. Most analysts have a higher estimate of inflation for the financial year.
However, analysts voiced concerns over the pick-up of inflation rate in the non-food article category.
“For food articles, it was supposed to come down, given the increase in supplies but the point is that sustained increase in inflation in the non-food article category, coupled with rising commodity prices, may create stress for industry. So, that is the concern right now,” said Rupa Rege-Nitsure, chief economist, Bank of Baroda.
