Do the common folk
of India figure prominently in the
Government’s economic growth agenda?
Here’s fnbworld’s
peek into the trends for food inflation in the
country: The Finance Ministry's Chief Economic
Advisor Dr. Kaushik Basu doesn’t mince
words, as he says, a fall in inflation would
happen after three months of fluctuation and rise
again in June due to the base effect.
Dr. Kaushik Basu recently told journalists in
Kolkatta: “For the next three months, there
will be fluctuating trend in inflation following
which it would see a fall,” the
manufacturing sector and non-food items,
especially metals on account of hardening global
prices. On a monthly basis, iron and steel prices
surged 11.40 per cent in April while basic metal
alloys and metal products turned 6.72 per cent
dearer. The spread of inflation to non-food
products is also evident in cotton textile prices
rising by 15.66 per cent and chemical products
turning more expensive by 5.67 per cent.
The WPI (wholesale price index) data released
here on Friday, May 14, for the month showed that
even as the provisional inflation figure for
April at 9.59 per cent marks a decline from 9.90
per cent (provisional) in March and 10.06 per cent
(revised) in February this year, the fall is
partly due to the rising base effect. In April
2009, inflation was pegged at 1.31 per cent,
slightly higher than 1.2 per cent in March that
year.
Finance Minister Pranab
Mukherjee said recently: “I will not be
surprised, if the inflation reaches double digits
in March,” he had said in Parliament. The
only difference is that the breaching took place
a month earlier in February as against the RBI
(Reserve Bank of India) projection of 8.5 per cent
for the end of the fiscal.
Meanwhile,
commenting on the inflationary trend, Chief
Statistician Pronab Sen said: “Fear of food
inflation spreading to other sectors is still
there. It will take a little bit of more time for
it to come down. I hope inflation would see a
declining trend hereafter.” The general
expectation is that headline inflation would
start to wane during the year and fall to 5.5 per
cent by March next year, as has been projected by
the RBI for the current fiscal. An imperative for
it being that the monsoon is normal and food
prices come down.
As of now, the April
inflation data manifests that potato prices fell
28.70 per cent during the month while onion
prices also dropped 11.62 per cent. Sugar prices
fell 5.74 per cent on a monthly basis, but were
dearer as compared to last year. The prices of
pulses went up by 2.47 per cent and milk by 2.96
per cent during the month while on a yearly
basis, they were higher by 30.42 per cent and
21.95 per cent, respectively.
