Fall in vegetable prices pulls inflation down to 2.93 per cent

After remaining below the two per cent mark for the successive 22 weeks, it crossed the three per cent barrier on November 6. A week later, it shot up further to touch 23-week high of 3.12 per cent. But on November 20, it slumped by 0.27 per cent to 2.85 per cent. It was in single digits for more than four years since April 15, 1995, when it was 9.90 percent.

The inflation rate which had been on low ebb during the last few months was mainly due to higher base last year when the vegetables prices were shooting up at a rapid pace due to poor agricultural production. But the things improved when the fresh arrivals of agriculture produce began pouring in into the markets. After a brief rise, the official wholesale price index for all commodities (base 1981-82) dipped by 0.1 per cent to 365.2 on December 25 from 365.7 due to moderate drop in the indices of food articles and food products.

The final wholesale price index for all (base 1981-82) stood at 370.4 on October 30 as against the provisional index of 369.8. The inflation rate calculated on final index worked out to 2.95 per cent in contrast to 2.78 per cent based provisional data.

The government was left with no other option but to hike the prices of diesel on October 5 to narrow down the hefty oil pool deficit to some extent. This rise was necessitated by the increase in prices of internationalpetroleum products which would have greater impact on Indian economy by the end of current fiscal.

The inflation rate based on consumer index for industrial workers which is the real barometer of retail prices dropped to zero per cent in November, whereas it was in double digits at 19.7 per cent during the corresponding month last year. It had been witnessing downward trends for the eight successive month since April while maintaining single digits for eleventh month in succession since January 1999.

With vegetables prices plummeting by 11 per cent, jowar and masur prices declining by three per cent each, rice, barley, gram and moong prices dropping by one per cent each, the index for food articles, under the primary articles group, slumped by 0.4 per cent to 453.7 from 455.7. But fruits became dearer by four per cent, ragi prices rose by two per cent, bajra, arhar, urad, fish and tea prices went up by one per cent each.

The index for non-food articles dipped by 0.1 per cent to 379 from 379.4 becauselinseed oil prices fell sharply by five per cent, rape seed and mustard seed prices came down by three per cent, raw wool prices went down by two per cent, gingelly seed, sunflower and raw tobacco prices slid by one per cent each.

But coir fibre prices skyrocketed by eight per cent, kardi seed prices rose by two per cent, raw jute, groundnut, raw rubber and fodder prices moved up by one per cent each. As mahua oil and oil cakes prices fell by two per cent each. and gur prices dipped by one per cent, the index for food products, under the manufactured products group, dropped by 0.3 per cent to 340.9 from 341.8. Due to variations in the prices of hessian cloth, the index for textiles moved up marginally to 324 from 323.9.

After remaining static for successive seven weeks, the index for paper and paper products rose by 0.2 per cent to 398.9 from 398.2 because kraft paper prices increased by three per cent, map litho paper prices moved up by two per cent and MG Paper poster prices up by one per cent. Butother boards prices dipped by one per cent.

A six per cent hike in prices of sulphuric acid and one per cent rise in prices castor oil neutralised with one per cent drop in prices of linseed oil with the result the index for chemical products remained static at its previous week’s level of 290.9.

A slender one per cent dip in the prices of house service meters made the index for other miscellaneous manufacturing industries came down by 0.1 per cent top 181.5 from 181.7.