Power tariff hike fuels inflation

The weakening of the rupee in the recent months may give way to a possible rise in the inflation rate, the financial experts say. A steep 1.9 per cent jump in the index for fuel, power, light and lubricants and one per cent increase in the index of non-metallic mineral products were the main factors for the wholesale price index for all commodities (base 1993-94) by 0.1 per cent to 153.4 from 153.2.

This moderate rise was despite the fall in the indices of food articles and non-food articles. The final wholesale price index for all commodities (base 1993-94) stood at 153 on July one as against the provisional index of 152.2. The inflation rate based on final index worked out to 6.47 per cent in contrast to 5.92 per cent based on provisional data.

In contrast, the inflation rate based on consumer price index for industrial workers which is the real picture of retail prices, dropped by 0.29 per cent to 4.95 per cent in July from 5.94 per cent in the previous week.

With barley prices declining by whopping 11 per cent, tea by fiveper cent, fruits and vegetables by four per cent, fish(marine)and fish(inland)by three per cent each, bajra, arhar, poultry chicken by one per cent each, the index for food articles, under the primary articles group, dropped by 0.8 per cent to 169.8 from 171.1. But the prices of moong and eggs rose by two per cent each, ragi, gram, milk, condiment and spices prices rose by one per cent each. The index for non-food articles fell by 0.6 per cent to 147.8 from 148.7 due to 17 per cent slump in the prices of fodder and 10 per cent drop in the sunflower prices. But the prices of raw silk rose by five per cent, mesta and copra up by two per cent each and raw skins prices rose by one per cent.

Five per cent jump in electricity tarrifs jacked up theindex for fuel, power, light and lubricants by 1.9 per cent to 198.3 from 194.6. The index for food products, under the manufactured products group, remained unchanged at its previous week’s level of 147.1 because six per cent rise in the prices of sugar and sweetmeat confectionary, two per cent hike in the prices of salt and coconut oil and one per cent increase of bran(all kinds)prices neutralised with four per cent decline in the prices solvent extracted groundnut oil and unrefined oil, and one per cent dip N the price maida, suji and groundnut oil. Similarly, the index for textiles remained static at its previous week’s level of 118.7 because one per cent hike in the prices of cotton grey cloth and canvas neutralised with two per cent drop in prices of hessian and sacking bags and one per cent dip in prices of hessain cloth. A two per cent hike in cement prices jacked up the index for non metallic mineral products by one per cent to 128.6 from 127.3.As aluminium bars and rods became costlier by three per cent and aluminium ingots by one per cent, the index for basic metal, alloys and metal products rose by 0.1 per cent to 139.3 from 139.1. But the steel ingots prices fell by two per cent. Due to a sharp four per cent hike in prices of electric motor(phase three) the index for machinery and machine tools went up by 0.1 per cent to 199.4 from 199.3. The indices that remained unchanged at their previous week’s level were minerals, beverages, tobacco and tobacco products, wood and wood products, paper and paper products, leather and leather products, rubber and and plastic products, chemicals and chemical products and transport equipment and parts.