Driven by higher prices of milk, wheat, rice and vegetables food inflation rose marginally to 17.87 per cent for the week ended February 20.
The food inflation in the previous week was at 17.58 per cent. On the annual basis, the prices of rice increased 10 per cent, wheat 14 per cent, pulses 35 per cent, onions 11 per cent and potatoes 28 per cent.
The inflation in fuel, power light and lubricant group was 9.59 per cent, slightly lower compared with 9.89 per cent in the previous week.
However, it is expected to surge significantly next week when the impact of the fuel price hike would be reflected in the index.
In the Budget tabled last week, the government hiked customs duty on petrol and diesel to 7.5 per cent from 2.5 per cent while excise duty was raised by Re 1 on non-branded (normal) petrol and diesel. This saw the oil companies immediately hike prices.
Beginning February 27, petrol prices rose by Rs 2.67 a litre and diesel by Rs 2.58 per litre in Delhi. The finance minister on Wednesday partly blamed the multi- level supply chain system for stoking prices of food articles in the country.
"Particularly with regards to food, I do agree that the cost of intermediation is very high from farm gate to the wholesale markets and from wholesale markets to retail markets," Finance Minister Pranab Mukherjee had said.
"And how to reduce the cost of intermediation is one of the terms of reference of the prime minister-appointed core committee of chief ministers, in which the agriculture minister and Planning Commission deputy chairman and I are members," he had said.
The cost of intermediation is abnormally high he said and admitted that perhaps it requires more competition.
One way to increase competition is to improve the distribution channels, and set up physical infrastructure for post-harvest storage, he said. During the week, the prices milk rose by 1 per cent and fish by 3 per cent while prices of fruits & vegetables, gram and barley eased by 3 per cent each).
At the same time, tea, wheat, eggs and arhar became cheaper by 1 per cent each. The non-food articles group rose by 0.1 per cent on account of higher prices of raw jute and raw rubber by 4 per cent each.
