Onion, food prices push inflation to 6-month high

New Delhi, Sep 16 (IANS) India's wholesale price based inflation surged to 6.1 percent in August, the sharpest pace in six months, driven by 245 percent jump in onion prices, making it difficult for the central bank to cut rates in the policy review due later this week.

According to official data released Monday, the headline inflation, measured in terms of the Wholesale Price Index (WPI), accelerated to 6.1 percent in August as against 5.79 percent in July.

Inflation was recorded at 8.01 percent during the corresponding month of the previous year, according to data released here by the ministry of commerce and industry.

There was a steep rise in food prices. Food inflation jumped to 18.18 percent in August as compared to 9.34 percent recorded in the corresponding month of last year. Food inflation was 11.9 percent in July this year.

Prices of vegetables almost doubled. Onion prices soared by 244.62 percent year-on-year.

Eggs, meat and fish became costlier by 18.86 percent. Rice became costlier by 20.13 percent. Wheat price jumped by 7.6 percent and prices of cereals soared by 14.35 percent.

Commenting on the monthly data, chairman of the Prime Minister's Economic Advisory Council C. Rangarajan said the depreciation in the value of rupee has led to the rise in inflationary pressure.

However, Rangarajan expressed hope that inflation would moderate in the coming months on the back of good monsoon.

"Over the next few months food inflation will start coming down because of good monsoon and that would have an impact on rest of things," he said.

Rangarajan said inflation would be around 5.5 percent by the end of the current financial year.

The headline inflation data for June was revised upward to 5.16 percent from 4.86 percent reported earlier.

In August, there was a sharp increase in fuel and power and primary articles prices also. Primary articles inflation soared to 11.72 percent. Fuel and power inflation jumped to 11.34 percent.

"The revival of inflation especially that of food prices, calls for urgent steps to address supply side bottlenecks which have been plaguing the sector," said Chandrajit Banerjee, director general, Confederation of Indian Industry (CII).

However, he said the rise in inflation should not come in the way of cutting rates by the central bank in the forthcoming monetary policy.

The Reserve Bank of India (RBI) is scheduled to announce its monetary policy Sep 20.

"While keeping inflation under check has to be a priority, it is imperative that we continue efforts to rekindle investor sentiment and push for higher growth," said FICCI secretary general A. Didar Singh, emphasizing on the need for rate cuts in the forthcoming policy review.

Matches

MORE TOP STORIES TODAY

Kallis, Narine star in Knight Riders’ crushing win

Kallis, Narine star in Knight Riders’ crushing win

An all-round display saw Knight Riders thump Mumbai Indians by 41 runs in the IPL-7 opener. More »

Pietersen to miss Delhi's first game

Pietersen to miss Delhi's first game

The former England batsman will have to lead the franchise as he is out of the match against Bangalore with a finger injury. More »

Srinivasan named in fixing report: SC

Srinivasan named in fixing report: SC

The court emphasised that the tainted administrator can no longer work for the BCCI. More »

'If you do the wrong thing it will be found out'

'If you do the wrong thing it will be found out'

'Everyone knows what is right and what is wrong and if you do the wrong thing it will be found out' More »

Why I'm not looking forward to the IPL

Why I'm not looking forward to the IPL

Welcome to another season of a league that many watch but few trust. More »

Mitchell Johnson may quit T20s for Test cricket

Mitchell Johnson may quit T20s for Test cricket

Australia's Mitchell Johnson may quit limited-overs cricket to prolong his test career with an eye on the 2015 Ashes series in England, the fast bowler… More »

There's a lot going on: Fleming

There's a lot going on: Fleming

He experienced anxious moments in the lead-up to the tournament as the courts decided on whether to suspend the franchise, he said, but stressed that the… More »

Latif couldn’t work with tainted players

Latif couldn’t work with tainted players

Former Pakistan cricket captain Rashid Latif said Tuesday he turned down the job of national chief selector because he could not work with ex-players tainted… More »

We are not over-confident: Bailey

We are not over-confident: Bailey

Indian Premier League — George Bailey-led Kings XI Punjab will face Chennai Super Kings on Friday. More »

Big runs expected, with bat and ball

Big runs expected, with bat and ball

Royal Challengers Bangalore: Their main concern, once again, is the fast bowling More »

Taxing issue — BCCI hits roadblock

Taxing issue — BCCI hits roadblock

MoU between BCCI & its units to avoid double taxation delayed after a few decline to share details. More »

Black Caps pick rookie duo for West Indies

Black Caps pick rookie duo for West Indies

New Zealand selectors included two new caps in a 15-man Test squad named Tuesday to tour the West Indies, with injury-hit spinner Dan Vettori's future… More »

The stage is set for IPL-7 to start

The stage is set for IPL-7 to start

The Preview — Defending champions Mumbai Indians take on Kolkata Knight Riders More »

Srinivasan appeals to court to allow BCCI comeback

Srinivasan appeals to court to allow BCCI comeback

He was aggrieved by the allegations against him during the hearing. More »

India: cricket's Brazil

India: cricket's Brazil

They are tough to beat with a big talent base exposed to good facilities. (CYCSPL) More »

Delhi Daredevils say no to gifts

Delhi Daredevils say no to gifts

Franchises are doing their bit to refurbish the image of the tainted league. More »

Klinger on his exit from South Australia

Klinger on his exit from South Australia

Michael Klinger has revealed he felt compelled to leave South Australia after being told he would be only a fringe part of the Redbacks' plans for next season, and disputed the suggestion that he left… More »

India-Pakistan Test series likely in 2015

India-Pakistan Test series likely in 2015

The revival of Indo-Pak Test ties could take place in UAE. More »

Kohli hopes to end RCB trophy drought

Kohli hopes to end RCB trophy drought

'This time around we will hope to go few more steps ahead and actually get that trophy' More »

Gavaskar can help IPL regain glory

Gavaskar can help IPL regain glory

Apart from the foreign players a lot of behind-the-scene activity has taken place in selecting the Indian domestic players. More »

Tendulkar, Ganguly to promote soccer

Tendulkar, Ganguly to promote soccer

Leading Spanish club Atletico Madrid and former cricketers Sachin Tendulkar and Sourav Ganguly are among the owners of eight franchises of a new Indian… More »

This isn’t my first trip to India: Neesham

This isn’t my first trip to India: Neesham

Kiwi all-rounder wants to utilise the India leg to explore the country’s tourist attractions. More »

Ishant wanted to quit ODIs

Ishant wanted to quit ODIs

Says his mother made him change his mind. More »

Supreme Court says no to BCCI’s request

Supreme Court says no to BCCI’s request

Bench refuses to grant access to recordings of Srini and Dhoni’s depositions before Mudgal committee. More »