NEW DELHI: For the first time this year, food inflation shrunk to single digit at less than 10% in the week ended July 17, providing the government a much-needed shield to ward off concentrated Opposition attack in and outside Parliament over rising food and fuel prices.
Continuing its downtrend for the second week in a row, the index slid 2.8 percentage points in the week under review from 12.47% in the preceding week. If the trend continues, it will also help headline inflation to cool and ease pressure on further tightening of key rates.
The latest slide, greatly due to high base affect, has been driven by falling prices of vegetables, especially potato and onion. This is the first time food inflation has come down to single digit since the government started giving separate figures for primary articles in November 2009.
"It is a very welcome news. Inflation has moved pretty much on cues as I had expected. It feels good. However, it should not be overinterpreted," the government's chief economic adviser Kaushik Basu said. Basu's caution is not misplaced. Thursday's data still shows pulses, milk and fruits becoming costlier by 21.23%, 19% and 12.14%, respectively, from a year-ago period.
The government has been under sustained attack from the Opposition parties, particulalry the BJP, for failing to check rising food prices. The NDA had even called a nationwide shutdown on July 5 which saw right wing BJP and the Left parties coming together on the issue. The Opposition also stalled Parliament over the issue, leading to adjournment of the proceedings in both the Houses.
TOI
Continuing its downtrend for the second week in a row, the index slid 2.8 percentage points in the week under review from 12.47% in the preceding week. If the trend continues, it will also help headline inflation to cool and ease pressure on further tightening of key rates.
The latest slide, greatly due to high base affect, has been driven by falling prices of vegetables, especially potato and onion. This is the first time food inflation has come down to single digit since the government started giving separate figures for primary articles in November 2009.
"It is a very welcome news. Inflation has moved pretty much on cues as I had expected. It feels good. However, it should not be overinterpreted," the government's chief economic adviser Kaushik Basu said. Basu's caution is not misplaced. Thursday's data still shows pulses, milk and fruits becoming costlier by 21.23%, 19% and 12.14%, respectively, from a year-ago period.
The government has been under sustained attack from the Opposition parties, particulalry the BJP, for failing to check rising food prices. The NDA had even called a nationwide shutdown on July 5 which saw right wing BJP and the Left parties coming together on the issue. The Opposition also stalled Parliament over the issue, leading to adjournment of the proceedings in both the Houses.
TOI
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