The Hindu Business Line : Inflation rate falls as prices of food items ease

Up and down
Prices of cereals, pulses and sugar declined
Malted food, vegetables and fruits gained
Fuels and lubricants increased due to rise in bitumen prices

New Delhi June 1 The annual wholesale price index-based inflation rose 5.06 per cent during the week ended May 19, lower than the previous week's increase of 5.27 per cent. The decline in the year-on-year inflation rate was mainly on account of an easing of prices in case of some food items, Government data showed on Friday.

It is for the fifth straight week that inflation has fallen, taking pressure off the Government and the Reserve Bank of India to tighten fiscal and monetary policies. The annual inflation rate was 5.05 per cent during the corresponding week of the previous year.

Prices may escalate

While inflation has been on the decline, it is feared that the rising demand in the economy might escalate prices. The apprehension was also expressed by the Finance Minister, Mr P. Chidambaram, on Thursday when he said the record economic growth of 9.4 per cent could exert pressure on prices, essential commodities in particular, in case supply fails to match demand.

The Wholesale Price Index of all commodities went up by 0.1 per cent to 211.9 points during the latest week, from 211.7 points a week ago. Prices of some food articles declined — cereals by 0.2 per cent, pulses by 0.4 per cent, processed tea by nine per cent, khandsari by four per cent, sugar by two per cent, butter and gur by one per cent each. Malted food was more expensive by 15 per cent, vegetables by 1.1 per cent and fruits by 0.5 per cent.

For the week ended May 19, prices of primary articles like raw wool declined by eight per cent, raw cotton and jute fell by one per cent.

Fire clay and fluorite were cheaper by six per cent and four per cent respectively. Increase in price of bitumen by two per cent led to a rise in the index of fuels, power, light and lubricants.

Metals

However, among metals, aluminium became cheaper by 3.3 per cent while zinc and zinc ingots declined by three per cent each. Prices of pig iron and foundry pig iron surged by four per cent each followed by two per cent increase in MS bars and rounds. Elsewhere, prices of zerda got dearer by 22 per cent, enamels by seven per cent, cement by 0.2 per cent and other automobile spare parts by four per cent.

Inflation for the week ended March 24, was revised to 6.54 per cent compared to the provisional figure of 6.39 per cent.

This was done as WPI for the week was revised to 210.1 points, against the provisional figure of 209.8 points.