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Journalism of Courage
NEW DELHI, MARCH 5: Triggered by the fall in the prices of primary articles, the inflation rate declined further for the fourth week in succession to a 28-week low of 2.08 per cent on February 19 after witnessing 20 week low of 2.37 per cent the week earlier.
It was the lowest inflation rate recorded since August 14, 1999 when it stood at 1.95 per cent (final). However, it was 5.70 per cent during the corresponding week last year.
The latest 0.29 slump in the inflation rate was on account of drop in the prices of tea, kardi seed oil, rape seed oil, mustard seed oil, soda ash and zinc. But vegetables, paper pulp and skelps saw a rise in their prices during the week under review. After touching the 32-week high of 3.31 per cent on January 15, the inflation rate nose-dived by 1.23 per cent in the matter of four weeks.
The Institute of Economic Growth (IEG) predicts that inflation rate may touch 3.26 per cent this month. According to IEG, the inflation rate may settle down between three to four per cent but its stability will depend upon the performance of winter crops. Many financial experts fear that the inflation rate may jump by the beginning of next fiscal and likely to cross four per cent during the first quarter.
Major industry chambers felt that the five per cent increase in freight charges in the recent railway budget would boost the industrial production cost. This may result in cost push the inflation rate. The government maintains that the budget proposals 2000-01 will have no impact on prices and projected five per cent inflation next year.
Despite the decline in the indices of food articles and food products, the official wholesale price index for all commodities (base 1981-82) remained static at its previous weeks’s level of 363.4 on February 19.
The final wholesale price index for all commodities (base: 1981-82) stood at 364.6 on December 25 as against the provisional index of 365.2. The inflation rate based on final index worked out to 2.76 per cent in contrast to 2.93 per cent based on provisional index. With international petroleum crude prices mounting rapidly, the government had no other alternative but hike the diesel prices on October five last year in a bid to reduce the oil pool deficit.
The inflation rate based on consumer price index for industrial workers which gives the real picture of retail prices rose marginally to 0.47 per cent in December after witnessing zero per cent in November. It has been on declining continuously for 11 months since January 1999.
With tea becoming cheaper by five per cent, jowar and barley prices down by two per cent each, milk, eggs and poultry chicken declining by one per cent each, the index for food articles, under the primary articles group, declined marginally to 442.9 from 430. But vegetables prices shot up by four per cent, maize, ragi, urad and mutton prices rose by one per cent each.
The two per cent rise in prices of mesta and one per cent hike in prices of copra and raw rubber neutralised with three per cent decline in prices of kardi seed, two per cent fall in prices of raw wool and one per cent slide in prices of raw silk and linseed, with the result the index for non-food articles remained static at its previous week’s level of 378.1.
As rape seed oil and mustard seed oil prices fell by three per cent, coconut oil and rice bran oil dropped by two per cent each, the index for food products, under the manufactured products group, slumped by 0.1 per cent to 336.5 from 336.9. But ghee, maida, suji and oil cakes became dearer by one per cent each. The index for textiles rose by 0.2 per cent to 327.4 from 326.8 because hanks became costlier by two per cent, cones, woollen yarn and hessian cloth prices increased by one per cent each.
But the prices of filament yarn synthetic prices dipped by one per cent. Due to three per cent hike in prices of pulp and one per cent rise in prices of white paper made the index for paper and paper products go up by 0.4 per cent to 399.7 from 398.
