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Commenting on the latest food inflation numbers, finance minister Pranab Mukherjee said the rise in rate of price rise was a matter of ‘grave concern’, but attributed this to the festive season, which led to an increase in demand
New Delhi: Food inflation in India rose to 12.21% during the week ended 22nd October from 11.43% in the previous week, the highest in nine months. The rise has been attributed to expensive vegetables, pulses, fruits and milk, putting more burden on the common man, reports PTI.
Food inflation, as measured by the Wholesale Price Index (WPI), stood at 13.55% in the corresponding week of the previous year.
As per data released by the government Thursday, vegetables became 28.89% costlier on a year-on-year basis. Pulses grew costlier by 11.65%, fruits by 11.63% and milk by 11.73%.
Eggs, meat and fish also became 13.36% more expensive on an annual basis, while cereal prices were up 4.13%.
However, onions became 20.33% cheaper. Wheat prices were also down 1.54% year-on-year during the week under review.
Commenting on the latest food inflation numbers, finance minister Pranab Mukherjee said the rise in rate of price rise was a matter of ‘grave concern’, but attributed this to the festive season, which led to an increase in demand.
“Inflation is still a matter of grave concern. This is also the affect of the festive season. November onward, the real trend for the remaining four months of the fiscal will be available,” he told reporters here.
On a weekly basis, inflation in the overall primary articles category stood at 12.08%, compared to 11.75% in the previous week. Primary articles have a weightage of over 20% in the wholesale price index.
Inflation in non-food articles, including fibres, oil seeds and minerals, was recorded at 6.43% during the week under review, as against 7.67% in the week ended 15th October.
Fuel and power inflation stood at 14.50% during the week ended 22nd October compared to 14.70% in the previous week.
The upsurge in food prices is likely to exert further pressure on the government and the Reserve Bank of India (RBI) to tackle the situation expeditiously.
Headline inflation, which also factors in manufactured items, has been above the 9% mark since December 2010. It stood at 9.72% in September this year.
The RBI has hiked interest rates 13 times since March 2010 to tame demand and curb inflation.
In its second quarterly review of the monetary policy last month, the apex bank said it expects inflation to remain elevated till December on account of the demand-supply mismatch, before moderating to 7% by March 2012.
The seasonally adjusted HSBC Service Sector Business Activity Index posted 49.1, from 49.8 in September, down for the second month in a row. The October reading is the weakest since April 2009
India’s services sector registered its slowest growth in the last two-and-half years. The seasonally adjusted HSBC Service Sector Business Activity Index posted 49.1, from 49.8 in September, down for the second month in a row. The October reading is the weakest since April 2009, the HSBC Services PMI release stated.
The HSBC Services PMI is based on data compiled from monthly a survey of purchasing executives in around 350 private service sector companies. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease.
Indian service providers witnessed a rise in new work intakes during the month under consideration, extending the sequence of sustained growth to two-and-a-half years. However, the rate of new business expansion was marginal and the second-slowest in that period.
Meanwhile, the HSBC India Composite Index—which covers both the manufacturing and service sectors —stood at 50.3, marginally up from September’s reading of 50.2.
However, service providers were optimistic that business activity would gain momentum over the next year, supported by investment in marketing initiatives.
Commenting on the India Services PMI, Leif Eskesen, chief economist for India & ASEAN at HSBC said, “The momentum in the services sector eased further in October with business activity declining sequentially and new orders expanding at a slower clip. This reflects the lagged impact of the monetary policy tightening undertaken so far, although partly also reported strike action.”
“On the inflation front, there was some relief with both prices charged and input costs rising less rapidly, although the former are still climbing fast by historical standards. The numbers confirm some re-balancing between growth and inflation risks, supporting RBI’s decision to signal a pause in the near term,” he added.