India's food price inflation eases further to 7.47 per cent

Food price inflation in the country eased further to 7.47 per cent during the week ended 7 May 2011, from 7.70 per cent in the previous week, as food prices continued to fall for the third week in a row, giving some hope to policymakers in their long battle against price volatility.

Finance minister Pranab Mukherjee said the current downward trend is likely to continue with enough foodgrain buffer stock in the country and an expected favourable monsoon in the coming months.

One worry for the government, however, is that the high non-food and primary product prices are creating cost-push inflationary conditions in the manufacturing sector and stymieing growth.

Food price inflation in the country stood at 22.15 per cent during the comparable week of the previous year.

While the inflation rate declined, the index for the 'food articles' group as a whole increased slightly, as the prices of most pulses such as gram and arhar as also fruits and vegetables and spices increased during the week.

Food articles have a weight of 14.34 in the wholesale price index (WPI) of commodities while primary articles have a weight of 20.12, non-food articles a weight of 4.26 and fuel and power group a weight of 14.91.