Average inflation during 2010-11 to jump up to 9%: FM

The finance ministry today said the average annual infation during the current fiscal will jump to 9 per cent, which is more than double the figure of 3.8 per cent recorded a year ago.   

"...The economic advisors tell that we are likely to end the year with 9 per cent (average) inflation for the year 2010-11," Revenue Secretary Sunil Mitra told reporters here. 

Inflation has been a major concern throughout the year, mainly driven by rising prices of essential food items including onion, other vegetables, fruit and milk.  

Last fiscal, wholesale price inflation stood at 3.8 per cent, Minister of State for Finance Namo Narain Meena had said.  

The year 2010-11 started with inflation of 9.59 per cent in April, and went into double digits in May and June at 10.16 per cent and 10.55 per cent, respectively.

Adding to the woes of the government, the overall inflation in December stood at 8.43 per cent, mainly due to rising food prices.  

The contribution of food inflation to overall inflation could be gauged from the fact that 'manufactured' inflation, in fact, came down to 4.46 per cent in December from 4.56 per cent in the previous month. 

Vegetable prices rose by 22.90 per cent in December versus the previous month. Within vegetables, onions turned expensive by 34.86 per cent and potato by 16.29 per cent.  

Finance Minister Pranab Mukherjee had said the current rate of inflation is "unacceptably high". He also discussed the issue with state finance ministers on January 19 this year.

Both Finance Ministry and Prime Minister's Economic Advisory Council expect wholesale price inflation to be around 7 per cent by March-end.