Inflation rises to 7.23 per cent in April; vegetable prices shoot up

Inflation moved up to 7.23 per cent in April on account of spurt in prices of vegetables, meat, milk and pulses, although onion and fruits showed a declining trend.

Inflation, as measured by the Wholesale Price Index (WPI), was 6.89 per cent in March. In April last year, it was 9.74 per cent.

Vegetables turned costlier by 60.97 per cent during April. In March, the rate of price rise in vegetables was 30.57 per cent. Pulses were expensive 11.29 per cent.

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Milk became costlier by 15.51 per cent, while rice and cereals turned costlier by 5.68 per cent and 5.8 per cent respectively. Prices of potato too rose by 53.44 per cent.

Besides, eggs, meat and fish prices rose 17.54 per cent during the month, slightly lower from 17.71 per cent in March.

However, as per the official data released today, inflation for the overall food items category was 10.49 per cent in April, as against 10.66 per cent in March.

Onion prices declined (-) 12.11 per cent in April. The rate of decline was (-)24.23 per cent in March.

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Food articles have 14.3 per cent share in the WPI basket.

Inflation in the price of manufactured goods increased marginally to 5.12 per cent in April, from 4.87 per cent in March.

The headline inflation number for February was revised upwards to 7.39 per cent, from the provisional estimate of 6.95 per cent.

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Inflation in overall primary articles inched up to 9.71 per cent in April, from 9.62 per cent in March.

On year-on-year basis, among manufactured items, iron grew dearer by 17.98 per cent while edible oil prices rose by 11.10 per cent. Inflation in tobacco products and basic metals was 9.48 per cent and 10.72 per cent respectively.

Non-food primary articles, which include fibres and oilseeds increased slightly by 1.61 per cent in April. In March, it was (-)1.2 per cent.

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Inflation in the fuel and power segment was 11.03 per cent on an annual basis. The rate of price rise was 10.41 per cent in the previous month.

Experts said the inflationary pressure, driven by prices of food articles, will keep the pressure on the government to remove supply side bottlenecks.

Overall inflation hovered at double digit for most of 2010 and 2011. The Reserve Bank hiked key policy rates 13 times, totalling 350 basis points, between March 2010 and October 2011 to tame inflation.

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Since January, RBI has resorted to injecting liquidity into the financial system, by reducing Cash Reserve Ratio for banks. Besides, it has called for fiscal steps by the government to combat inflation.

However, in its annual monetary policy last month, RBI cut key lending rate by 50 basis points to lower borrowing costs amid falling industrial and economic growth.

RBI has projected inflation to be around 6.5 per cent by March 2013, with a caution that it will remain sticky and there is need to arrest the decline in economic growth.