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Inflation accelerates as onion costs jump
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Print India’s food inflation accelerated to a six-week high, adding pressure on authorities to curb a jump in onion prices that has forced the nation to halt exports of the staple this week.
An index measuring wholesale prices of agricultural products including lentils, rice and vegetables compiled by the commerce ministry rose 12.13% in the week ended December 11 from a year earlier, a trade ministry report showed in New Delhi yesterday. The index gained 9.46% the previous week.
Opposition parties have criticised Prime Minister Manmohan Singh’s government for failing to check rising prices and the central bank has raised interest rates to contain inflation that’s triggered labor strikes and public protests. The Bharatiya Janata Party was defeated in local elections in 1998 after a surge in onion prices.
"Everyone, irrespective of economic condition, would have to use it on a day-to-day basis and it is a very sensitive item both from an economic point of view and political point of view," Siddhartha Sanyal, chief India economist at Barclays Bank Plc’s investment banking division, said. "They cannot ignore it."
India will take steps to cool food inflation and onion prices will ease soon, Cabinet Secretary K M Chandrasekhar said yesterday. The government said it would buy the crop from abroad.
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