Food inflation falls to 16.30 pc
The decline is offset by high fuel prices
The rising spree in the overall price line continues to remain firm even as food inflation fell to 16.30 per cent for the week ended March 6 due to marginal decline in prices of pulses and vegetables.
The marginal fall in food inflation, which stood at high of 17.81 per cent in the previous week, was offset with the fuel inflation shooting up to 12.68 per cent thus making no impact on the overall inflation. The overall inflation now threatens to reach the double digit figure by zooming to 9.89 per cent for February from a low of 1.34 per cent in October last year.
The overall inflation has already breached the Reserve Bank’s projection of 8.5 per cent by end of this fiscal in January this year when it touched 8.56 per cent. Analysis of latest food inflation data shows vegetable prices showed a marked decline of more than 10 per cent over the week, followed by about 4 per cent fall in prices of pulses.
However, noticeable decline in food prices has been offset by rising fuel inflation.
The spiraling rise in inflation is fast emerging as most difficult economic challenge facing the government with Finance Minister Pranab Mukherjee and Planning Commission Deputy Chairman Montek Singh Ahluwalia admitting that rising inflation was a matter of concern.
Ahluwalia noted that inflation, which is almost nearing double digit figure, has already crossed its “comfort zone”.
He said RBI while reviewing its monetary policy would have to strike a balance between controlling inflation and protecting growth momentum.
RBI hints at early interest rate hike
The Reserve Bank of In dia, on Thursday, did not rule out the possibility of interest rate hikes ahead of its April policy if inflation continues to rise from the current level of around 10 per cent, reports PTI from New Delhi.
“If it is inevitable and the price situation warrants so, action can be taken any day,” RBI deputy governor KC Chakrabarty told reporters here on the sidelines of the Skoch summit.
The RBI deputy governor further said the current price situation is “definitely a concern.”
