Onion prices go up by 150%, food inflation hits households

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New Delhi, March 14: With drought in major states and scanty rainfall last monsoon, the rise in wholesale price-based inflation to 6.84 percent is a matter of concern for the families.

High food prices had pushed the consumer price index (CPI) based inflation to 10.91 percent in February as compared to 10.79 percent in the previous month.

After declining for four consecutive months, wholesale inflation rose to 6.84 per cent in February due to a sharp increase in fuel, food and vegetables prices, the government data showed on Thursday.

Onion prices went up by 154.33 percent, potato prices almost doubled and overall vegetables prices increased by 12.11 percent during the month under review year-on-year, according to data released by the ministry of commerce and industry.

There was also a sharp increase in cereals and fuel prices that hit the common people hard.

Cereals became costlier by 19.19 percent. Price of rice surged by 18.84 percent, wheat became costlier by 21.63 percent and pulses became dearer by 14.96 percent.

There was a sharp increase in the prices of diesel and cooking gas as the government allowed the oil marketing firms to hike diesel prices and put a cap on cooking gas supply.

Fuel and power inflation rose to 10.47 percent. Liquefied petroleum gas (LPG) became costlier by 26.21 percent and diesel became costlier by 19.19 percent year-on-year.

The price rise seems due to both increasing demand and failure to manage the supply chain. Deficient rains in the first half of the monsoon also hit farm produce.

In a recent interview, Planning Commission member Abhijit Sen said food inflation seemed more a factor of poor food management than production shortfalls.

Last week, the Centre had declared "the highest relief package in recent years" of over Rs. 2892 crore for seven States including drought-hit Maharashtra to deal with the impact of calamities.

It also revised the guidelines for relief under "crop loss" and raised the assistance by 50 per cent in all categories including rain-fed and irrigated areas and for perennial crops. The expenditure for cattle at camps, including the cost of medicines and water supply, was also raised by the government.

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