Food inflation down to 1.81% as grain, vegetable prices plummet
22 Dec 2011
India's food inflation fell to its lowest in almost four years as prices of vegetables and grains tumbled, official data today showed, buttressing the government's claim that inflation is on the decline and the Reserve Bank of India can focus on growth rather than taming prices.
Annual food inflation dropped to 1.81 per cent for the week ended 10 December from 4.35 per cent in the previous week and almost 11 per cent a month and a half back, as prices of essential produce such as vegetables, onions, potatoes, wheat and other consumables fell sharply.
Analysts expect the food inflation rate to ease further, helped by seasonal factors and the high base effect of last year.
Food inflation was recorded at 13.22 per cent in the corresponding week of 2010.
It has stayed in double digits almost all year, putting added pressure on the Congress-led United Progressive Alliance government reeling from corruption scandals and charges of policy paralysis.
Food prices, a key driver of headline inflation which measures the cost of goods across the economy, are is at their lowest level since early February 2008, when inflation stood at 2.26 per cent.
