Gokarn Says India’s Food Inflation Rate Is ‘Worryingly High’

Reserve Bank of India Deputy Governor Subir Gokarn comments on the nation’s food inflation rate. He was speaking in the Indian city of Indore today. India’s food inflation, measured by wholesale prices, surged 18.32 percent in the week ended Dec. 25 from a year earlier, the highest since July, according to a commerce ministry statement in New Delhi today. “Food inflation level has been worryingly high despite good monsoon this year. “The new wholesale-price index, which has higher weight for protein sources, reflects the changing consumption pattern because prices of these items are rising steadily. “On the other hand, the consumer-price index basket still gives predominant weight to cereals, reflecting consumption pattern of many years ago. “Because, cereal prices have been favorably impacted by good monsoon, the overall inflation measured by the consumer- price index presents a relatively more optimistic picture. The prices are high but falling rapidly. “This difference adds another dimension to the problem of choosing between indices.”