New Delhi: India’s food inflation accelerated ahead of a report to be released on Friday that may show that monsoon this year will be sufficient to cool prices.
An index measuring wholesale prices of agriculture products, including lentils, rice and vegetables, compiled by the commerce ministry rose 17.65% in the week ended 10 April from a year earlier. It gained 17.22% the previous week, according to a statement in New Delhi on Thursday.
The Reserve Bank of India is relying on normal rains to drive down food prices and almost halve the benchmark inflation rate to 5.5% by March. India’s June-September monsoon may be adequate, two government officials said on Wednesday before the meteorological department’s forecast on 23 April.
“If monsoon isn’t normal, then inflation expectations will remain high and food inflation will linger longer at high levels,” Shubhada Rao, chief economist at Yes Bank Ltd, said in an interview in Mumbai.
Rainfall in India will be 98% of the 50-year average in the monsoon season, the government officials said. Last year’s rains were the worst since 1972, cutting production of rice, wheat and sugar.
A weak monsoon may force the central bank to step up efforts to curb inflation, governor D. Subbarao said in an interview on Wednesday.
Bharatiya Janata Party, the main opposition party to the Congress-led United Progressive Alliance government, rallied through the streets of New Delhi on Wednesday against rising prices.