The Hindu : Kerala / Kochi News : ‘Rising price in non-food articles causing inflation’

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‘Rising price in non-food articles causing inflation’

Special Correspondent

KOCHI: The spiralling price of non-food articles compared with the price of food articles is one of the major reasons for the inflationary situation witnessed by the Indian economy, according to a study conducted by R. Sthanumoorthy, assistant professor, Indian Institute of Management Kozhikode.

The high prices of primary food articles including food grains are not the principal factor responsible for food price inflation currently witnessed in the country, according to him. The three food products namely oil cakes, edible oils, and dairy products have found to be the major contributors of the current food price spiral.

The peak inflation rate, year-on-year, of non-food articles was over 17 per cent against over 7 per cent for food articles. On an average, the non-food articles have recorded an inflation, period-on-period, of 13.52 per cent during the current price spiral against 5.01 per cent for food articles, which is much lower than the average overall inflation of 8.39 per cent. Interestingly, the period-on-period average inflation rate of 9.05 per cent recorded for the food articles during the corresponding period last year (December 23, 2006 to August 18, 2007) was much higher than today.

The root cause of the high inflation of edible oils has been the higher edible oils imports since November 2007 against soaring international prices.

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