New Delhi, Jan 5 (IANS): India's annual food inflation slipped into negative for the first time in "recent memory" as prices of vegetables, onions and potatoes fell sharply, official data showed on Thursday.
The annual food inflation fell to -3.36 percent for the week ended Dec 24, as compared to 0.42 percent in the previous week and 20.84 percent during the corresponding week of last year.
"There has been substantial improvement. Food inflation has turned negative for the first time in recent memory," Finance Minister Pranab Mukherjee told reporters while reacting on the weekly data. Prices of vegetables are less than half during the week under review when compared to the price during the corresponding week of last year. Onions became cheaper by 73.74 percent while price of potatoes dropped by 34.01 percent year-on-year, according to data released by the ministry of commerce and industry.
Food inflation has dropped for the ninth consecutive week. After remaining stubbornly near double-digit for almost two years, food inflation has dropped sharply in the last two months. Food inflation came down to single-digit in the second week of November and has dropped consistently since then. It was recorded at 10.63 percent for the week ended Nov 5.
Inflation in overall primary article, which has 20.12 percent weight in the wholesale price index, also dropped sharply to 0.10 percent for the week ended Dec 24 as compared to 2.70 percent in the previous week and 22.68 percent in the corresponding week of last year. However, fuel and power inflation rose marginally to 14.60 percent during the week under review as compared to 14.37 percent in the previous week.
The recent drop in food inflation and easing in overall inflationary pressure may prompt the central bank to cut interest rates.
The Reserve Bank of India last month kept policy rates unchanged after hiking the key rates 13 times since the beginning of 2010. The headline inflation based on the wholesale price index was recorded at 9.11 percent in November, according to the latest available data.