India's annual food inflation dropped a tad to 16.24 percent for the week ended Sep 25 compared to 16.44 percent the previous week, as supply of essential items, disrupted by heavy rains and floods in parts of the country, began turning normal.
The annual inflation rate for the primary articles group, however, continued with its fast paced increase, rising 18.53 percent during the week under review, against 18.31 percent recorded in the week ended Sep 4, official data showed.
The index for fuels was unchanged at 10.73 percent during the week.
The government Sep 14 shifted the base year for the official wholesale price index to 2004-05, from the earlier 1993-94, and added as many as 241 new items to its basket of commodities. The weightage for individual commodities were also altered.
Both the weeks under review were calculated according to the new base year.
The barometer for food prices had been on the rise from Aug 14, when it was at 10.05 percent. In just over a month, it went up by 6.4 percentage points.
The still-high food prices will again strengthen the case for the Reserve Bank of India to tinker with the monetary policy to tame prices. The review of the policy comes up on Nov 2.
The RBI had in September hiked its short-term borrowing and lending rates by 50 basis points and 25 basis points respectively.
"The current inflation scenario is a cause of concern, as the inflation rate persists well above the upper bound of the comfort zone," said Subir Gokarn, deputy governor, RBI.
"Food prices, in particular, are now being driven by some structural imbalances between demand and supply, as increasingly affluent consumers diversify their dietary patterns away from cereals and towards protein sources," he added.