New system to provide real picture of price situation: govt

Conceding that WPI-based inflation was not reflecting the rising prices adequately, the government today said the new mechanism has been devised to provide a better picture of the price situation.

"So this change enables everyone to understand and know reality (about price situation)...," Industrial Policy and Promotion Secretary Ajay Shankar told reporters when asked why the government had decided to release inflation data monthly for commodities and weekly for primary articles and fuels.

As per the new weekly data for primary articles and fuel released yesterday, the food inflation, driven by spiralling potato prices and onion, stood at 13.94 per cent against the WPI-based inflation for commodities at 1.51 per cent.

Going by the weekly data, potato prices doubled during the one-year period, while the price of onion rose by 50 per cent and pulses by 23.45 per cent, even though WPI-based inflation during the course of the year slipped below zero per cent and remained there for almost three months.

Similarly, increases have also been noticed in prices of other essential items reflecting the impact of poor monsoon and floods on the price situation.

Both Agriculture Minister Sharad Pawar and Finance Minister Pranab Mukherjee have expressed concern about rising prices. Rabi (winter crop), they believe, would improve the supply of farm goods and ease prices in the coming months.