The Hindu Business Line : Cheaper food items peg down inflation to 6.39%

New Delhi April 5 The annual wholesale price index (WPI)-based inflation rose 6.39 per cent during the week ended March 24, marginally lower than the previous week's annual rise of 6.46 per cent.

The dip in the year-on-year inflation rate was primarily on account of a fall in prices of some food items and manufactured products.

The WPI (base 1993-94), on which inflation data is based, rose 0.2 percentage points to 209.8 points during the week, from 209.4 points the previous week.

Price pressure

The annual inflation rate was at 4.06 per cent during the corresponding week of the previous year.

Despite the dip in the rate during the latest reported week, inflation was way above the RBI's projection of 5-5.5 per cent for the current fiscal.

Price pressures continue to be strong in certain primary articles and manufacturing products items.

Tea, barley ease

Items such as tea, barley, fruits and vegetables and raw cotton saw decline in prices during the week, while items such as urad, gram, masur, fish-inland and condiment and spices saw a rise.

In the manufactured products' group, oilcakes, imported edible oils, hessian clothes and acids became expensive.

However, prices of sugar, paper products and non-ferrous metals declined.

Inflation crossed the upper limit of the tolerance band (5-5.5 per cent) projected by the RBI for 2006-07, in mid-November 2006.

It rose further and crossed the six per cent mark in the first week of January 2007 and has remained well above six per cent mark since then.

Urad dearer

Within the Primary Articles' group, the Food articles group index declined marginally during the week, mainly driven by lower prices of tea, barley and fruits and vegetables, which fell by four per cent, three per cent and one per cent respectively.

However, prices of urad went up by four per cent.

Fish costly

Fish-inland, gram, masur and condiments and spices became expensive by one per cent each.

Among non-food articles, raw cotton became expensive by 13 per cent while castor seed and sunflower prices went up by six per cent and five per cent.

Silk, jute dip

However, the prices of raw silk, ground seed and raw jute declined by three per cent, two per cent and one per cent respectively.

Niger seed and raw tobacco each got dearer by three per cent each. Within the Manufactured Products' group, prices of groundnut oil and khandsari became cheaper by one per cent each.

Zinc and zinc ingots prices became cheaper by two per cent, while tyre cord prices went down by 10 per cent.

Oil cakes expensive

However, oil cakes became expensive by three per cent, while gingelly oil and imported edible oil both went up by one per cent each.

Final inflation figures for the week were revised upwards to 6.69 per cent for the week ended January 27, compared to 6.58 per cent estimated provisionally.

This is based on revision in WPI to 209 points from 208.8 points estimated earlier.