INDIA

Encouraged by moderate fall in inflation in July from 9.44 per cent in June, Finance Minister Pranab Mukherjee said that the government and the Reserve Bank are working in tandem to check rising prices.He expressed the hope that inflation would moderate in the coming months. However, experts said headline inflation would remain elevated for some more time, and may go up to close to double- digit in August, prompting the RBI to continue with its current policy of monetary tightening."Inflationary pressure is in the system and we shall have to make efforts to have the inflationary pressure at an acceptable moderate level for which we are working in tandem with the Reserve Bank," Mukherjee told reporters here.He said a good monsoon and the policies of the government and the RBI are expected to help ease price pressure further. "I am quite confident that a good monsoon will ensure moderation of inflationary pressure. The measures taken to remove supply constraints in some of the agricultural products and the monetary policy adopted by the RBI will help bring about moderation of inflationary pressure...," he said.Even as all commodities continued to grow expensive, inflation in July was lower than the previous month as prices rose at a lesser rate on yearly basis compared to June.On yearly basis, the rate of price rise of food articles was at 8.19 per cent in July, lower than 8.38 per cent in June, as per the data released today. Cereals were expensive by 5.32 per cent, vegetables by 7.67 per cent, onion by 27 per cent, fruits by 15.11 per cent and milk by 10.77 per cent in July.Inflation in overall primary articles, which have a share of over 20 per cent in the wholesale price index basket, stood at 11.30 per cent in July, down from 12.22 per cent in June.Prices of manufactured products, which constitute over 65 per cent of WPI basket, went up by 7.49 per cent in July. Inflation in manufactured products has been rising steadily since February this year, when it crossed the 6 per cent mark. It was 7.43 per cent in June.In the manufactured items segment, cotton textiles became dearer by over 22 per cent, wood and its products by 9.41 per cent, iron by 19 per cent and basic metal alloys by 10 per cent on yearly basis.Inflation in the fuel and power segment was at 12.04 per cent in July, down from 12.85 per cent in June. The segment has a weight of almost 15 per cent in the WPI basket.In addition, inflation in non-food primary articles was lower at 15.51 per cent in July, from 18.57 per cent in the previous month.The inflation in July is the lowest in eight months. The previous low of 8.20 per cent was reported in November 2010.Chief Economic Advisor Kaushik Basu said inflation would remain high for some months and peak at close to double-digit in August, before moderating. [More]
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