Veggie prices push inflation to 0.79%

New Delhi, June 14

A sharp spike in vegetable prices like tomato pushed wholesale price inflation to 0.79 per cent in May -- the fastest pace since October 2014 -- sending the government scrambling for ways to control it.

The faster-than-expected 0.79 per cent rise in wholesale prices comes on top of consumer prices (retail inflation) surging 5.76 per cent in May, the fastest rate in 21 months.

The WPI inflation print in May compared against 0.34 per cent rise in April and (-) 0.45 per cent in March. WPI inflation stood at (-)2.20 per cent in May last year, according to government data released here today.

Tomato prices in most retail markets across the country have doubled to Rs 80 per kg in the last 15 days due to sluggish supply owing to crop damage. Potato rates have also been on the rise. Retail prices of pulses are still ruling high at over Rs 170 a kg.

Concerned over rising prices of pulses and other essential commodities, Finance Minister Arun Jaitley is slated to review the situation when he meets key ministers, including Transport Minister Nitin Gadkari, Food Minister Ram Vilas Paswan, Agriculture Minister Radha Mohan Singh and Commerce Minister Nirmala Sitharaman, tomorrow.

Steps to check food inflation as well as efforts being taken to boost supply of pulses through its newly-created buffer stock and also from imports are likely to be discussed. Industry too is demanding policy action to address supply-side constraints.

With the firming up of both wholesale and retail inflation, the Reserve Bank may delay the interest rate cut despite a sluggish industrial output.

WPI Inflation in vegetables stood at 12.94 per cent in May, a sharp rise from 2.21 per cent a month earlier. Pulses inflation remained stubborn at 35.56 per cent. Food inflation rose to 7.88 per cent in May as against 4.23 per cent in April, the data showed.

"Policymakers need to address through supply-side responses the continuous rise in prices of commodities like pulses, food articles, cereals, wheat and other items," Assocham secretary general DS Rawat said. — PTI