India's Food Inflation Rate Soars .

Continuing its upward trend, India's annual food inflation rate for the week ended October 15 soared to 11.43 percent due to increase in the prices of milk, egg, fish, cereals, fruits, rice, wheat and onion.

Food inflation rose sharply since the week ending September 17 with spikes in some items being attributed to lower output because of heavy rains.

Annual inflation rate of food article prices, as measured by the wholesale price index, or WPI, (with base year 2004-05) for the week ended October 15 shot up to 11.43 percent from 10.60 in the preceding week.

Percentage of inflation for the corresponding week in the preceding year was 14.20 percent. The 52-week average inflation for the week ended October 15 was 10.60 percent, according to data released by the Ministry of Commerce & Industry.

Annual percentage of inflation for 'Non-Food Articles' declined to 7.67 percent from 8.51 in the preceding week. The 52-week average inflation for the week ended October 15 was 22.14 percent.

Primary articles

Annual rate of inflation for the week ended October 15 was 11.75 percent, marginally up from last week's level of 11.18 percent. It was 17.91 percent for the corresponding week of the preceding year. The 52-week average inflation for the week was 14.06 percent, the data revealed.

Index for this group, with a weightage of 20.12 percent, rose by 0.34 percent from the previous week's level.

These groups and items showed variations:-

The index for 'Food Articles' group grew by 0.25 percent from the previous week. The items for which the index showed increase are condiments and spices, gram, fish-marine, maize and pork. However, the prices of chicken, bajra, egg, ragi and urad declined.

Index for 'Non-Food Articles' was down by 0.06 percent, on lower prices of flowers, gaurseed, raw jute, castorseed, groundnutseed and nigerseed, while those of gingellyseed, raw silk, fodder, raw cotton, raw rubber and copra moved up.

Index for 'Minerals' was up by 1.84 percent on higher prices of steatite, barites and crude petroleum, whereas those of zinc concentrate, sillimanite, copper ore, manganese ore and iron ore dropped.

Fuel & Power

Annual rate of inflation for the week ended October 15 was 14.70 percent, lower than the previous week's level of 15.17 percent. The 52-week average inflation for the week was 12.37 percent, the data revealed.

Index for this major group carrying a weightage of 14.91 percent was unchanged at its previous week's level of 170.1.

The Reserve bank of India (RBI) Tuesday increased the key policy rates by 25 basis points to contain inflation. The apex bank raised the repo, to 8.50 percent from 8.25 percent, with immediate effect. The reverse repo, the rate at which the central bank borrows from banks, was automatically adjusted to 7.50 percent from 7.25 percent.

RBI retained the cash reserve ratio of scheduled banks at 6.0 percent. It also deregulated the savings bank deposit interest rate with immediate effect, allowing the banks to determine their savings bank deposit rate.

During the second-quarter monetary policy review, RBI Governor Duvvuri Subba Rao said the inflationary pressures were expected to ease starting December 2011 and might go down to seven percent by March 2012 and hence the apex bank might not be required to further hike rates to curb inflation.

Source : rttnews.com