India's inflation rises to 7.23% in April

 

 

Vegetables turned costlier by 60.97 per cent during April. In March, the rate of price rise in vegetables was 30.57 per cent. Pulses were more expensive by 11.29 per cent. Milk went dearer by 15.51 per cent, while rice and cereals turned costlier by 5.68 per cent and 5.8 per cent respectively. Prices of potatoes too rose by 53.44 per cent.

 

Besides, eggs, meat and fish prices rose by 17.54 per cent during the month, slightly lower from 17.71 per cent in March.

 

However, the official data released today showed that inflation for the overall food items category was 10.49 per cent in April, as against 10.66 per cent in March.

 

On the positive side, onion prices declined by 12.11 per cent in April. The rate of decline was (-) 24.23 per cent in March. 

 

Food articles have 14.3 per cent share in the WPI basket. 

 

Inflation in the price of manufactured goods increased marginally to 5.12 per cent in April, from 4.87 per cent in March. 

 

The headline inflation number for February was revised upwards to 7.39 per cent, from the provisional estimate of 6.95 per cent. Inflation in overall primary articles inched up to 9.71 per cent in April, from 9.62 per cent in March.

 

On an year-on-year basis, among manufactured items, iron grew dearer by 17.98 per cent while edible oil prices rose by 11.10 per cent.

 

Inflation in tobacco products and basic metals was 9.48 per cent and 10.72 per cent respectively. 

 

Non-food primary articles, which include fibres and oilseeds increased slightly by 1.61 per cent in April. In March, it was (-) 1.2 per cent.

 

Inflation in the fuel and power segment was 11.03 per cent on an annual basis. The rate of price rise was 10.41 per cent in the previous month.

 

Overall inflation hovered at double digits for most of 2010 and 2011.

 

The Reserve Bank hiked key policy rates 13 times, totalling 350 basis points, between March 2010 and October 2011 to tame inflation.

 

Since January, the RBI has resorted to injecting liquidity into the financial system, by reducing cash reserve ratio for banks. Besides, it has called for fiscal steps by the government to combat inflation.

 

However, in its annual monetary policy last month, the RBI cut key lending rate by 50 basis points to lower borrowing costs amid falling industrial and economic growth. 

 

The RBI has projected inflation to be around 6.5 per cent by March 2013, with a caution that it will remain sticky and there is need to arrest the decline in economic growth.

 

Meanwhile, expressing concern over the rise in food inflation, finance minister, Pranab Mukherjee today said the prices could be kept under check through institutional reforms in agricultural marketing and he would discuss the issue with states.

 

Reacting to the latest WPI inflation data, he said the rise in prices of food items could be checked by creating storage facilities and bringing in institutional reforms in agricultural marketing.

 

"Food inflation is a matter of concern, particularly it has reached the double digit level...Food inflation can be tackled by creating storing facilities and cold chain and also is required the institutional reforms in the agricultural marketing.

 

"In both these areas state governments have to take appropriate steps, I will also discuss with them,” Mukherjee said