New Delhi: Thanks to the moderation in food inflation, Finance Minister Pranab Mukherjee on Thursday said the rate of price rise of kitchen items would fall further in coming weeks, while prices of non food items would remain a matter of concern. 

“We hope to see further moderation in food inflation in the coming weeks,” Mukherjee said in response to a decline in food inflation to an 18-month low of 7.7 per cent for the week ended April 30, due to a drop in the prices of pulses and vegetables, especially potatoes.

The recent monetary policy announcements should help in addressing these concerns, he added.

However, the Minister said, “There are concerns on the price momentum in non-food articles... Sustained high non-food primary prices are creating cost-push inflationary conditions in the manufacturing sector.”

He further said, “Even though food inflation is declining, the concern on higher core inflation remains.”

Cost-push inflation is a type of inflation caused by substantial increases in the cost of important goods or services where no suitable alternative is available.

Industrial growth slowed down to 7.8 per cent in 2010-11 from 10.5 per cent in the previous fiscal mainly on account of the poor performance of the mining and manufacturing sectors, coupled with lower production of capital goods, data released on Thursday showed.

The manufacturing sector, which accounts for almost 80 per cent of the index, saw its annual growth fall to 8.1 per cent in 2010-11 as against 11 per cent growth in the previous fiscal.

The growth in factory output in March, as measured in terms of the Index of Industrial Production (IIP), indicated that it has improved to 7.3 per cent from 3.6 per cent in February this year.

But the IIP growth in the March last year was much higher at 15.5 per cent.

The decline in the food price segment is seen as a breather for the government, as inflation has stubbornly remained high despite its fiscal measures and the RBI’s monetary steps.

(Agencies)