Food inflation, as measured by the Wholesale Price Index (WPI), stood at 15.1 per cent for the week ended September 4, primarily due to rise in prices of vegetables and milk. The latest figures are according to the new inflation data series with a revised base of 2004-05 and have seen some enhancement due to change in the methodology of collecting data for the index.
According to the revised series, food inflation stood at 14.64 per cent, during the corresponding week a year ago. The figure is not comparable to the previous week when food inflation stood at 11.47 per cent, calculated on the older base year of 1994-95.
The rise in food prices in the last three weeks have been accorded to disruption of supplies due to rains and statistical base effect.
“Food inflation has been pushed up due to the base revision and also because of a general rise in price level. With the new harvest, inflation will come down to single digits by the end of this year,” said D K Joshi, chief economist with ratings agency Crisil.
Deloitte chief economist Shanto Ghosh also said food inflation would come down to single digits by the end of this calendar year.
Food inflation had been fuelling the overall inflation rate for the last one year and was being closely monitored by the Reserve Bank of India. However, since this February, inflation in the manufacturing category had added on to food inflation.
Despite having a lower weight of 14.33 per cent from 15.4 per cent in the overall inflation index, food inflation is still a concern as stated by Finance Minister Pranab Mukherjee earlier.
