Date:27/12/2008 URL: http://www.thehindu.com/2008/12/27/stories/2008122758011000.htm

New Delhi

Primary articles continue to rule high: Ministry

Special Correspondent

Food inflation inched up to 10.46 per cent from 10.19

New Delhi: Even as the drop in inflation for the seventh straight week has prompted analysts to project that the price spiral will be at about two per cent by the end of the current fiscal, the Finance Ministry thinks that the prices of primary articles are still too high for comfort.

“Prices of primary articles continue to rule high, despite the decline in overall inflation,” the Ministry said in its statement.

During the week ended December 13, manufactured products turned cheaper with a fall in the prices of groundnut oil, sugar, cement and certain textile items and basic heavy inorganic chemicals slumping by 7.2 per cent.

Among food items, the prices of vegetables fell by more than three per cent followed by tea, rice and spices, while sea fish, wheat and bajra were dearer.

However, despite the fall in overall inflation, food inflation inched up to 10.46 per cent from 10.19 during the week as non-processed food and raw items turned costlier. In the ‘primary articles’ group also, the rate of inflation rose from 11.81 to 12.15 per cent, mainly owing to the increase in iron ore prices.

In the coming weeks, the rate of inflation is expected to dip further following another cut in the price of aviation turbine fuel in keeping with the trend in international markets.