Inflation drops to 1.62 pc

NEW DELHI, AUG 1: The inflation rate fell to a two-decade low of 1.62 per cent for the week ended July 17, despite a marginal rise in the...

NEW DELHI, AUG 1: The inflation rate fell to a two-decade low of 1.62 per cent for the week ended July 17, despite a marginal rise in the wholesale price index (WPI). The fall in the annual rate of inflation was mainly on the account of a higher base last year due to an abnormal increase in vegetable prices

For instance, the index for vegetables during the current week is 456.0 compared to 732.1 in the same period last year. During the reference week, rate of inflation fell by 0.23 percentage points to 1.62 per cent (provisional) from 1.85 per cent (P) the week before. In comparison, inflation rate was higher at 8.22 per cent during the corresponding week of last year.

The wholesale price index for all commodities’ (Base: 1981-82100) during the current week rose by 0.1 per cent to 357.3 (provisional) as against 357.0 (P) for the previous week.

Prices of agricultural produce are moving up at a much slower rate than last year due to a bumper foodgrain production this year. In comparison, prices ofagricultural products were shooting up around this time last year.A slackness in demand for industrial products, which accounts for 57 per cent of the weight in the index, also helped the southward movement in the inflation rate.

The final WPI and annual rate of inflation for the week ended May 22 remained unchanged at 357.6 (p) and 3.95 per cent respectively at the previous week’s levels.

In line with the fall in general inflation, annual rate of inflation based on consumer price index for industrial workers (CPI-IW) also fell sharply by 2.4 percentage points to 5.3 per cent in June. The point-to-point inflation had stood at 7.7 per cent in May and 12.4 per cent in June last year. The all-India consumer price index for industrial workers (Base: 1982100) in June stood at 420 as against 419 in May.

Among the WPI, while indices for food articles and non-food articles rose by 0.3 and 0.1 per cent respectively, index for manufactured products remained static at the previous week’s levels.

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Index for fuel,power, light & lubricants, the third major item in the WPI, moved up by 0.1 per cent compared to the previous week. Commodities which witnessed substantial fluctuations in their prices were wheat and barley (up 3 per cent each), raw silk (up 8 per cent), raw rubber (down three per cent), sheet glass (up five per cent) and springs (up 6 per cent).

The index for primary articles moved up marginally by 0.2 per cent to 382.2 (p) from 381.4 (p) the previous week due to increase in prices of both food and non-food articles. Food articles’ index rose by 0.3 percentage points to 448.9 during the reference week from 447.5 a week ago owing to higher prices of wheat and barley (3 per cent) and bajra, ragi and condiment and spices (1 per cent each).

However, prices of arhar and eggs (2 per cent each) and fruits (1 per cent) from the same sub-group eased during the week.

Index for non-food articles increased marginally to 370.6 from 370.4 the previous week on account of higher prices of raw silk (8 per cent) and rawcotton and fodder (1 per cent each). Prices of raw rubber (3 per cent) and groundnut seed and cotton seed became cheaper during the week.

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Index for fuel, power, light & lubricants rose by 0.1 per cent to 395.0 (p) as compared to 394.5 (p) the previous week due to the increase in prices of high speed diesel oil (one per cent).