High inflation not acceptable, says Pranab

Attributing the latest jump in food inflation mainly to rising prices of protein-based items, Finance Minister Pranab Mukherjee on Thursday said the high inflationary regime was not acceptable and efforts would be made to bring it down.

"We are in the region of high inflationary regime, which is not acceptable. It will have to be brought down," Mukherjee told reporters here while commenting on food inflation, which touched two-and-half-month high of 9.13 per cent for the week ended June 11.

Food inflation, as measured by the Wholesale Price Index, stood at 8.96 per cent during the previous week. It was almost 23 per cent during the second week of June, 2010.

"Detailed analysis of food items indicate that it is substantially contributed by the milk products, poultry products, fish and certain other items," Mukherjee said.

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The minister, however, expressed satisfaction that inflation in overall primary articles came down during the week.

"On the whole, the figures are not satisfactory... but not disappointing in the sense that the WPI primary articles have come down from 12.86 per cent to 12.62 per cent," the finance minister said, adding that cereal prices have also moderated during the week.

Primary articles have a share of over 20 per cent in the overall WPI basket.

Referring to the non-food items, Mukherjee said they have "been steadily declining from 23.82 per cent just a month back... every subsequent week from May 7 to June 11 it has steadily declined. That is one important aspect."

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As per the WPI data, inflation in non-food primary articles declined from 23.82 per cent for the week ended May 7 to 18.43 per cent during the reporting week.

Fruits and milk became dearer by 28.66 per cent and 15.30 per cent, respectively, during the week ended June 11. The other items which became more expensive during the week were onions (11.89 per cent), eggs, meat and fish (10.56 per cent), cereals (4.32 per cent) and potatoes (0.71 per cent).

However, prices of pulses, wheat and vegetables went down during the week. While pulses became 10.34 per cent cheaper, wheat was down 1 per cent and vegetables 9.27 per cent.

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Overall, primary articles reported inflation of 12.62 per cent during the period under review, down from 12.86 per cent in the previous week.

Meanwhile, inflation of non-food primary articles stood at 18.43 per cent for the week ended June 11 as against 20.20 per cent during the previous week.

Fibres grew more expensive by 43.77 per cent and minerals by 25.90 per cent. Fuel and power became dearer by 12.84 per cent and petrol was up 33.23 per cent year-on-year.