Food inflation up to 16.35%

However, the food inflation, rise of which is putting pressure on the overall inflation measured by the Wholesale Price Index (WPI), stood at low of 16.22 per cent for the week ended March 13. The rise in food prices as noticed in the week ended March 20 was   primarily driven by pulses and milk.

Chief Economic Advisor Kaushik Basu said that the inflation rate would likely to come down in June –July following expectation of good monsoon as well as fall in global oil prices.  He said though prices of some of the food items have come down in recent months, some of food grains prices continued to remain at higher level.  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.

With the swelling in overall inflation rate the RBI is likely to tighten money supply when it meets later this month for the review of its monetary   policy, thereby making all sorts of borrowing ranging from car and home loans to commercial borrowing. Apart from pressure from rising food inflation the overall inflation is moving upward because of rise in fuel prices.