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Food inflation softens to 16.81 percent | Food inflation based on the wholesale price index softened to 16.81 percent for the week ended January 9, although potato and pulses continued to cost high. Earlier, the food inflation for the week ended
January 2, stood at 17.28 percent, due to soaring prices of essential commodities.
According to the government data, on year-over-year milk prices soared by 13.95
percent and it is expected to surge further on lower availability. Potato remained
expensive during the period rising as much as 49.31 percent from last year, followed
by prices of pulses which jumped by 47.90 percent. The marginal decrease is being
seen after Prime Minister Dr. Manmohan Singh chaired the Cabinet Committee on
Prices (CCP) meeting to discuss the issue of spiraling food prices, including
sugar prices. The CCP has reportedly taken decisions on increasing the availability
of sugar and other commodities, to contain food inflation after it had soared
to 20 percent in the first week of December. Several Ministers including Planning
Commission Deputy Chairman Montek Singh Ahluwalia had earlier said that the current
food inflation would be eased by the end of next month. "The dominant part of
inflation that is a concern is food price inflation. I don't believe that is the
result of excess liquidity though clearly when inflation begins to go up, I mean,
one of the instruments that people use is the monetary instrument. So I don't
want to speculate, I think to come to a conclusion because we have a problem with
one set of prices, what is the ideal way of responding, that is a complex issue,"
Ahluwalia said. "I think in our case, a lot of it has to do with expectations,
managing the supply side and better use of existing stock. Plus, I think that
with fears of the negative effect of the drought being reduced there will be a
softening in the food price inflation in the next month," he added. |
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