India's food price inflation rises to 8.04 per cent

Food price inflation in the country based on the wholesale price index of food articles stood higher at 8.04 per cent during the week ended 23 July 2011 against the 20 month-low of 7.33 per cent hit the previous week.

It was 16.27 per cent during the comparable week of the previous year.

Facing heat from the opposition in Parliament over the unrelenting increase increases in the prices of essential commodities, finance minister Pranab Mukherjee said the factors causing the price spurt are more extraneous and the government has limited powers to check the current trend in prices.

"Inflation is basically the product of serious mismatch between demand and supply. If I understand correctly, it does not mean we should not have growth. We should have growth but with moderate rate of inflation. We are trying to reach that objective," he said.

Former finance minister and BJP leader Yashwant Sinha, however, cautioned the government against opening up retail business for foreign investment in a bid to check inflation as it may make matters worse for the economy by opening floodgates of cheap imports.

The increase in food price inflation has been due mainly to higher prices of fish (fresh water), grains like jowar, bajra, maize and barley as also moong, gram and tea, which moved up by 1 per cent each.