Higher weight of food items causing high retail inflation: Govt

A higher weight of food items in the consumer price index has kept retail inflation at elevated levels in the country, according to official data.

The high inflation in India owes to "higher weight for the food basket (about 50%)" as against 14% and 32% weights for Korea and China, respectively, according to the data.

The consumer price index-based inflation remained elevated at 9.5% in 2013 and 10.2% in 2012.

In 2013, CPI inflation or retail inflation in China stood at 2.6%, Korea 1.3%, Sri Lanka 6.9%, Indonesia 6.4%, Malaysia 2.1% and Thailand 2.2%.

In 2012, the respective inflation in these countries were 2.6% (China), 2.2% (Korea), 7.5% (Sri Lanka), 4% Indonesia), 1.7% (Malaysia) and 3% (Thailand).

CPI inflation in Pakistan stood at 7.4% in 2013 and 11% in 2012.

"Government is closely monitoring the situation and taking measures on an ongoing basis to bring down inflation," an official said.

The difference in inflation in Asian countries may be on account of several factors such as composition, base, weights of respective CPI basket, structure of the economy, resource endowments and distribution of income, he added.

To bring down inflation, government has made several announcements in Budget 2014-15 including technology driven second green revolution with focus on higher productivity and protein revolution.

Apart from these, a price stabilisation fund has been proposed to mitigate risk of price volatility in agriculture produce.

Restructuring of Food Corporation of India (FCI) and reducing cost of transportation, distribution losses and improving efficacy of public distribution system are amongst other measures announced.

The Budget has also announced to allocate Rs 50 crore each for developing an indigenous cattle breed and initiate a blue revolution in inland fisheries.

India's CPI inflation in June 2014 dipped to a 30-month low of 7.31% mainly on fall in prices of food items, including cereals, meat and vegetables. It was 8.28% in May.

Food inflation fell to 7.97% in June against 9.56% in May.