Inflation declines marginally to 7.25%

Inflation, as measured by the Wholesale Price Index (WPI), was 7.55 per cent in May. In June last year, it was 9.51 per cent.

However, there was no respite from the rising prices of primary food items like rice, wheat, vegetables including potatoes.

Overall food inflation rose to 10.81 per cent in June, from 10.74 per cent in May. In June last year, inflation rate in this category was 7.6 per cent. Food articles have 14.3 per cent share in the WPI basket.

Reserve Bank Governor D Subbarao commenting on rate of price rise said, "we are way above the threshold on inflation. It, however, does not imply any action to be taken by the RBI. WPI inflation at 7.25 per cent and CPI at double digits, certainly we are above the threshold."

Terming the rate of price rise as "a matter of concern", Planning Commission Deputy Chairman Montek Singh Ahluwalia said: "Inflation is high mainly because of food and non-core elements. We hope that we will be able to bring it down...Still a problem."

According to Prime Minister's Economic Advisory Council Chairman C Rangarajan: "The inflation shows some tendency to decline. That is a good trend. The non-food manufacturing inflation is around 5 per cent, which is reasonable. However, the primary articles and food inflation needs to be watched.

"The prospects for the monsoon are not very clear at the moment and, therefore, we need to watch out for food inflation," he said.