The Hindu Business Line : Inflation rises on costlier manufactured items

The wholesale price index-based inflation rose 5.43 per cent during the week ended December 16, higher than the previous week's annual rise of 5.32 per cent.

The increase in the year-on-year inflation rate was mainly due to a rise in manufactured products prices, Government data showed on Friday.

Primary articles down

The Wholesale Prices Index (base 1993-94), on which the data is based, rose 0.05 per cent to 207.8 points for the week ended December 16, from 207.7 points in the previous week. The annual inflation rate was 4.62 per cent during the corresponding week of the previous year. During the week under review, the Primary Articles' group was marginally down by 0.1 per cent at 211.8 points. The Manufactured Products' group was up 0.2 per cent at 180.8 points while the fuel, power, light and lubricants' group was unchanged at the previous week's level of 322.6 points.

Among the Primary Articles' group, the prices of bajra increased by three per cent, while barley, wheat, arhar and jowar rose by one per cent each.

Cereals, on an average, rose by 0.6 per cent, while pulses by 0.2 per cent.

However, other items of daily consumption such as fruits and vegetables and eggs became cheaper by two per cent each.

Prices of rapeseed and mustard seed moved up by one per cent, while soyabean and raw silk declined by two per cent and one per cent, respectively.

Among the Manufactured Products' group, the food products such as salt, gur and black tea leaf became costlier. While unblended black tea leaf rose by 23 per cent, salt became more expensive by three per cent and gur by one per cent. However, prices of processed tea declined by eight per cent, rapeseed oil and mustard oil, sugar, imported edible oil rice bran oil and gingelly oil declined by one per cent each.

Copper items up 12%

Among other manufactured products, copper bars and rods moved up by 12 per cent, while canvas footwear and decorative laminates rose by eight and seven per cent respectively.

Similarly, prices of PVC insulated cables increased by nine per cent. However, rubber slippers became cheaper by 13 per cent.

The annual inflation for the week ended October 21 was revised to 5.61 per cent, against the provisional estimate of 5.41 per cent. The WPI for the week ended October 21 stood at 208.8 points, compared to 208.4 points in the provisional estimates.

WPI

The wholesale price index is more closely watched than the consumer price index because it has a higher number of products in its basket and is published weekly. The Reserve Bank of India estimates inflation at the end of the financial year in March 2007 to be in a 5-5.5 per cent range.

In order to contain prices, the Government has cut import duty on wheat and allowed the import of essential commodities on easier terms.