Food-price inflation accelerated for the fourth straight week, adding pressure on Finance Minister Pranab Mukherjee to maintain tax-free imports of crude edible oil and wheat.
An index measuring wholesale prices of lentils, rice, vegetables and other food articles compiled by the commerce ministry increased 17.94 percent in the week to Jan. 30 from a year earlier after a 17.56 percent gain the previous week, according to a statement in New Delhi today.
Mukherjee may keep import taxes on wheat, pulses and other food items at near zero in the budget on Feb. 26 to boost supplies, analysts said. The biggest challenge for policy makers is to slow inflation to an "acceptable level" of 4 percent to 5 percent, Chakravarthy Rangarajan, the top economic adviser to Prime Minister Manmohan Singh, told Bloomberg News this week.
"Curbing food inflation will be high on the agenda in the budget," said Shubhada Rao, chief economist at Yes Bank in Mumbai. "They may also partially roll back excise duties to tone down demand to more realistic levels."
Source BloombergUTV
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