Ending a four-month declining trend, the wholesale price based inflation rose to 4.86 percent in June against 4.7 percent in the previous month, as kitchen items like onions, rice and other cereals became costlier, adding to the woes of the government struggling to arrest the falling rupee that is putting pressure on prices and closing shut the doors on a rate cut by the central bank at the end of the month.
Food inflation rose to 9.74 percent, driven by price rise in onion, cereals and rice in June, against 8.25 percent in the previous month, as per the industry ministry data. Vegetable prices went up by 16.47 percent from 4.85 percent in May. Inflation in onion shot up by 114 percent in June as against 97.40 percent in May.
Inflation in the manufactured items category, however, declined to 2.75 percent in June from 3.11 percent in May.
The value of the rupee, which touched all time low of 61.21 to a dollar earlier this month, is fuelling inflation, especially in the prices of petroleum products. Government as well as the RBI have been taking steps to strengthen rupee. The consumer price index (CPI) based retail inflation for June too had also inched up marginally. As per the WPI data, non-food articles category which includes fibre, oil seeds and minerals, saw a sharp rise in inflation to 7.57 per cent, from 4.88 per cent in May. Meanwhile, inflation for April has been revised downwards to 4.77 percent from 4.89.
Inflation in egg, meat and fish was 12.23 per cent during June as compared to 11.21 percent in May. Price rise in cereals and rice was high at 17.18 and 19.11 percent. Potatoes, however, saw decline in rate of price rise to (-)14.22 percent, from (-)3.44 percent in May. Pulses too declined sharply to 1.59 percent during June, from 5.95 percent in May. For the fuel and power basket, inflation was lower at 7.12 per cent in June as compared to 7.32 per cent in May.
Ficci President Naina Lal Kidwai said the industry body will like to reiterate the need to gear up steps to address supply side bottlenecks. Another business chamber Assocham said both the government and the RBI need to focus on boosting economic growth as it is the only sound solution. "The need of the hour is to boost investor sentiment. The upcoming quarterly monetary assessment must take this necessity into account," it said.
