The Hindu Business Line : Inflation rate dips on cheaper primary items

There was decline in the rate of inflation of rice, wheat, pulses, vegetables and edible oils. However, sugar inflation was at a higher rate of 23.1 per cent.

Our Bureau

New Delhi, March 5 Inflation slowed to the lowest since 2002, giving the Reserve bank of India room to add to Wednesday’s interest rate cuts.

The annual Wholesale Price Index-based inflation rose 3.03 per cent in the week ended February 21, lower than the previous week’s annual rise of 3.36 per cent.

The fall in the year-on-year inflation rate by 33 basis points was on account of a dip in primary and manufactured product categories, according to data released by the Commerce Ministry here.

The inflation rate was recorded at 5.69 per cent during the corresponding week of the previous year.

The official WPI for ‘All Commodities’ for the latest reported week declined by 0.1 per cent to 227.6 points, from 227.8 points for the previous week.

The current rate of inflation is the same as was recorded in the week ending October 19, 2002.

Primary articles

On a disaggregated basis, in case of the ‘primary articles’ group, inflation declined to 6.0 per cent in the latest week as against 7.3 per cent in the previous week. In case of ‘primary food articles’ group, year-on-year inflation declined to 8.3 per cent during the latest reported week, as compared with 9.9 per cent last week.

In ‘non-food articles’, inflation fell to 1.7 per cent compared with 2.9 per cent in the previous week, while in ‘minerals’, inflation remained stable at (-) 1.2 per cent.

In ‘fuel and power’, inflation remained stable at (-) 4.0 per cent as in the last week.

Manufactured products

In ‘manufactured products’, inflation rate was recorded at 4.5 per cent during the latest reported week, marginally lower than the 4.7 per cent registered last week. Within the manufactured products group, inflation in food products remained stable at 7.5 per cent, while inflation in non-food manufactured products, with 52.2 per cent weight in WPI basket, decelerated to 3.8 per cent, showing a decline of 69 basis points as compared to last week.

Inflation in the food index (with a weight of 25.43 per cent) for the latest week was lower at 7.7 per cent compared with 8.6 per cent last week, due to decline in the rate of inflation of rice, wheat, pulses, vegetables and edible oils.

However, current sugar inflation recorded a higher rate of 23.1 per cent.

“The monthly WPI inflation for January 2009 recorded 5.2 per cent (provisional), which is lower than the inflation of CPI-Industrial Workers (10.5 per cent), CPI-Agricultural Labourers (11.6 per cent) and CPI-Rural Labourers (11.4 per cent).

CPI inflation is expected to come down in the next few months due to declining trend in the WPI food items,” a Finance Ministry statement said.

For the week ended December 27, the final WPI for ‘All Commodities’ stood revised to 229.4 points as compared with the provisional estimate of 229.5 points while the annual rate of inflation based on final index, calculated on point to point basis, stood at 5.86 per cent as compared to the provisional estimate of 5.91 per cent.

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