Surging food prices push inflation to 6.11%

With the surge in prices of food items including pulses, fruits, vegetables and eggs continuing, inflation based on the wholesale price index has again increased to 6.11% for the week closing January 20 as compared to 5.95% during the previous week.

Although, inflation had touched 6.12% during the week ending January 6 this fiscal, but it came down to 5.95% in the following week.

The sharp increase in prices of food articles including pulses like arhar and moong, fruits, vegetables, eggs, textile, wool, sugarcane coupled with the prices of metal and paper products have led to the increase in overall inflation.

The cut in customs duty on edible oil, cement and other manufacturing products, along with the RBI's decision to tighten the liquidity in the market announced on January 31 will take some time to dampen the rising prices due to a time lag factor, said government officials.

The wholesale price index for all commodities for the week ended January 20, 2007, rose 0.1% to 208.5 from 208.3 for the previous week.

Notably, inflation was just 3.86% during the week ended January 7, 2006, and 4.24% as on January 21 last year.

Data released by the government today revealed that index of food articles, which severely affects the common-man, rose 0.4% to 214.6% due to higher prices of eggs, condiments and spices (4% each), pulses like arhar (2%), moong and masur (1%).

The prices of fruits and vegetables, besides maize and marine products also increased 1%.