Rising food prices have pushed inflation into the positive territory after a gap of 13 weeks. The wholesale price index-based inflation rose to 0.12 per cent for the week ending September 5, up from (-) 0.12 per cent in the previous week, raising concerns that the Reserve Bank could up rates sooner than expected.

The food articles’ inflation jumped to 15.4 per cent for the week ended September 5, up from 14.8 per cent the previous week. In order to check soaring food prices, the Cabinet on Thursday asked states to regulate stocks of sugar, pulses, paddy, rice and edible oilseeds that traders can keep till September 2010. The government had earlier empowered states to impose limits on sugar stocks till January 8, 2010, and on pulses, paddy, rice and edible oilseeds till September 2009.

Finance minister Pranab Mukherjee on Thursday said that the rise in inflation was expected. “This is a trend, we were expecting. We have also suggested that there would be some inflationary pressure which is not unexpected,” he said. Build up inflation in the financial year so far — or inflation between April 1 and September 5 — was 5.86 per cent, compared with a build up of 6.62 per cent in the corresponding period last year. India may need to raise interest rates earlier than other countries as inflationary pressures are building up, RBI governor D Subbarao had said on Tuesday. Markets were unperturbed by the latest inflation data, with bond yields little changed before the release and the 30-share Sensex 0.20 per cent higher at 16,711.11 points on Thursday. Subbarao projected an inflation rate of more than 5.2 per cent by March 2010.

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