The wholesale price index (WPI)-based inflation rate moved up to -0.21% for the week ended August 22, as compared to -0.95% recorded in the previous week, as per figures released by the Union Commerce Ministry. However, there is no respite for the common man as food inflation is still considerably high, making it difficult for the poor to make both ends meet.

Food inflation increased 14.5 per cent on a year-on-year basis during the reporting week; and is likely to surge further given the poor monsoon in the country. Food prices including vegetables, fruits and essential commodities, are soaring in the country; and may prove to be a notable hurdle in the way of the incumbent government going to seek public mandate in the Assembly elections in Maharashtra, Haryana and Arunachal Pradesh in the second week of October.

Meanwhile, the planning commission has warned against a rise in WPI above the RBI’s forecast of 5 per cent in the current fiscal. The government has directed states to takes steps to prevent black marketing and hoarding of essential items, using their special rights specified under the Essential Commodities Act and the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act.

Chetan Ahya, an Economist at Morgan Stanley, said: “If the rabi crop is affected much more than expected, then the risk of inflation sustaining for a longer period will increase.”