December 31, 2009 11:48:38 am
Costlier essential items like potatoes and pulses pushed up food inflation to 19.83 per cent in the third week of December after easing a bit in the previous week,belying hopes of any sustained relief for the common man.
The wholesale-price based index of food articles rose by 1.18 per cent for the week ended December 19 from 18.65 per cent a week ago. A week before that,food inflation stood at the decade’s highest level of 19.95 per cent.
The rise in food prices is mainly due to dearer essential items like potatoes,onions,pulses etc.
Potato price more than doubled while pulses became costlier by over 41 per cent over the last year. Besides,onion rose by 40.75 per cent.
In Kolkata,Finance Minister Pranab Mukherjee said farm production is likely to contract in the third quarter due to the poor monsoon. If this happens,inflation may not ease substantially. However,he said there is no sign that excess money supply is leading to inflation.
But analysts say there is still a risk of high food prices and the RBI could take monetary tightening measures to moderate it.
The RBI will come out with its third quarter review of the monetary policy on January 29.
According to the Prime Minister’s economic advisory panel,the overall inflation is likely to cross RBI’s estimate of 6.5 per cent and it may have to take monetary action to tame it.
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