NEW DELHI–India’s annual retail and wholesale inflation rates rose considerably in November to 5.41 percent and (-)1.9 percent respectively, due largely to an increase in the prices of food items like pulses, official data showed on Monday.
The inflation rates for October stood at 5.0 percent at retail and (-)3.81 percent at wholesale levels.
Data on consumer price index (CPI) released by the Central Statistics Office here, showed that the retail inflation for rural areas was much higher at 5.95 as against 4.71 percent in urban India. For pulses, the combined inflation rate was a whopping 46.08 percent.
In fact, the food inflation based on retail prices was 6.07 percent at an all-India level, and 5.83 percent and 6.53, respectively at the rural and urban levels. This has inched up from 5.25 percent, 5.18 percent and 5.47 percent.
The Reserve Bank of India (RBI) had set a target of 6 percent annual retail inflation rate for January 2006, saying this was within reach, despite the ill-effects of scanty monsoon an the persistent inflationary pressures.
“Taking all this into consideration, inflation is expected to broadly follow the path set out in the September review with risks slightly to the downside,” the central bank had said in a review earlier this month.
Earlier in the day, data on wholesale price index showed that there was no respite yet from rising food prices, notably pulses, which pushed up the inflation rate based on this set of statistics to (-)1.99 percent for November, against (-)3.81 percent for the month before.
These numbers, released by the Ministry of Commerce and Industry, showed that prices of food articles rose sharply by 2.3 percent in just a month in November, as prices of fish, meat, eggs, lentils, condiments and spices, and fruits and vegetables all registered a rise.
Food inflation for the first eight months moved up above the zero percent level to 3.12 percent from (-)1.2 percent during the month under review. The annual index numbers for petrol, diesel and cooking fuels also rose, while still in the negative.
Pointing towards the continuing rise in the wholesale prices of the food segment, particularly in vegetables and pulses, the Federation of Indian Chambers of Commerce and Industry (Ficci) pushed for agriculture sector reforms.
“It also remains imperative that the supply side bottlenecks are removed and leakages are plugged,” the chamber’s secretary general A. Didar Singh said. He also maintained that the weakness in prices of manufactured items pointed towards depressed demand.
The Associated Chambers of Commerce and Industry of India (Assocham) said that the negative WPI, was in line with the industry expectation and was mainly contributed by softening of potato, minerals, high speed diesel, sugar and iron prices.
“The continuous downtrend in WPI seen over the past few months is a positive signal towards stabilisation of prices but the policy makers need to check continued price pressure in pulses and onions,” said D.S. Rawat, secretary general of Assocham.
The business chamber elaborated that RBI has met the conditions of budgeted WPI and CPI, which provides the central bank room for further rate cut to substitute for weakening global demand.
Fitch Group company — India Ratings and Research — pointed out that pulses inflation can flare up inflation further, as it was mainly instrumental in pushing retail prices in November.
“Going forward, while sufficient food stock will play its role in managing cereals inflation, pulses inflation would continue to exert pressure on headline inflation,” said Devendra Kumar Pant, chief economist at India Ratings and Research.