New Delhi: Inflation rose to 4.86 percent in June, mainly driven by rising prices of food items, especially vegetables including onion. Inflation based on the Wholesale Price Index (WPI) stood at 4.70 percent in May and in June, 2012, it was 7.58 percent.
As per the official data released on Monday, WPI inflation in the food articles category rose to 9.74 percent, driven mainly by price rise in onion, cereals and rice.
The rate of price rise in food articles, which has a 14.34 percent share in the WPI basket, was 8.25 percent in May. Inflation in onion prices shot up by 114 percent in June, from 97.40 percent in the previous month.
Vegetables prices too went up by 16.47 percent during the month, from 4.85 per cent in May. It was (-)9.05 percent in April.
Inflation in the manufactured items category however, declined to 2.75 percent in June from 3.11 percent in May. The non-food articles category, which includes fibre, oil seeds and minerals, saw a sharp rise in inflation to 7.57 percent, from 4.88 percent in May.
Inflation for April was revised downwards to 4.77 percent from 4.89 percent as per provisional estimates. The inflation data would be closely watched by the Reserve Bank while formulating its first-quarter policy scheduled for July 30. There have also been demands for lowering interest rate in the backdrop of declining inflation.
While the Reserve Bank has lowered interest rates by 1.30 percent since January 2012, the banks have cut lending rates by only 0.30 percent.


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