Much to the discomfort of the government, food inflation continued its northward movement rising for the fifth consecutive week as disruption of transportation in northern India because of recent rains and subsequent floods, hampered movement of goods.
According to data released on Thursday by ministry of commerce and industry, India's food inflation rose sharply to 16.44% for the week ended September 18 as vegetables and fruits continue to become dearer. Last week the food inflation was reported at 15.46% in the previous week.
Finance minister Pranab Mukherjee expressed hope that rise in inflation graph would soon ease after arrival of kharif produce into the market. "It would (be) over in a few days, there would be some moderating influence and the monetary policy, which we have adopted, will also mop up the excess liquidity from the market," Mukherjee said.
Economists and analysts said the prices would ease as rains have started to recede and kharif farm output will start coming into the markets in the next few days. "Rains definitely impacted supplies to an extent but the current price rise is mainly because of overreaction of the market because of forth coming festival seasons and commonwealth games," Ramesh Chand, director, National Centre for Agricultural Economics and Policy Research told FE.
with thanks : Financial Express : link in headline above for more details.
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