New Delhi: Inflation declined to 5-month low of 5.19 percent in July on account of decline in vegetable prices, though the impact of poor monsoon on overall price situation continues to be a concern.
The Wholesale Price Index based inflation was at 5.43 percent in June, and 5.84 percent in July last year, according to the data released by government today.
Inflation in the overall food articles basket, which accounts for 14 percent of the total WPI, stood at 8.43 percent. It was at 8.14 percent in June.
However, inflation in vegetables as a group declined 1.27 percent. Onion prices fell by 8.13 percent, year-on-year, in July. Potato prices, on the other hand, shot up 46.41 percent and fruits by 31.71 percent. The rate of price rise in milk was at 10.46 percent.
Inflation for the eggs, meat and fish category stood at 2.71 percent in July as against 10.27 percent in the previous month.
Commenting on inflation, Ficci President Siddharth Birla said: "While risks on account of monsoon and volatility in crude oil prices have receded for the time being, some degree of ambiguity remains. Inflation continues to be a concern as prices of food articles are still elevated... It needs to be assured that the industrial growth is not stifled and recent momentum seen in IIP numbers is kept pace with."
According to the data, the rate of price rise in pulses was 3.31 percent. It was at 4.46 percent for cereals. For rice, it was 6.85 percent and wheat 1.02 percent in July.
Inflation in the manufactured products was at 3.67 percent, and non-food articles, which include fibre, oil seeds and minerals, at 3.32 percent.
Inflation in the fuel and power category, meanwhile, was down at 7.40 percent from the previous month.
The WPI data was revised upwards for May to 6.18 percent, from 6.01 percent as per provisional estimates.
"Good to note that headline inflation has eased to a two month low in July. It is anticipated that food inflation would come down in the coming months considering that monsoons have started picking up pace and the rain deficiency has come down significantly," industry body CII said in a statement.
The recent initiatives taken by the government to contain inflation would act as a lever to tackle inflation and curb inflationary expectations, CII added.
The Reserve Bank in its monetary policy review last week had cautioned that continued uncertainty over monsoon could stoke food inflation, but expressed the hope that government policies will improve supplies in the coming months.
Consumer Price Index based retail inflation for July, in contrast to WPI, rose to 7.96 percent over a price rise of 7.46 percent in the previous month.
"Decline in WPI inflation to five months low is really encouraging and would pave the way for growth to pick up pace in the coming times, said Sharad Jaipuria, President of PHD Chamber.
As the monsoon scenario is not that much promising in the current year, the government should take measures to mitigate the impact of deficient monsoon on prices of agricultural commodities, he added.
