The Hindu Business Line : Actual inflation may be higher than provisional figures

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New Delhi Jan. 30 While increasing inflationary pressure could well be the big worry for the Reserve Bank of India ahead of its quarterly policy, more alarming though could be the possibility of actual inflation being higher than the provisional figures being reported week after week.

This is, if the gap between the `final' and `provisional' estimates of the annual wholesale price index (WPI)-based inflation for each week since September is anything to go by.

The accompanying table gives the point-to-point inflation rate figures over a 11-week period, extending from the week ended September 9 to the one ended November 18, for which the final WPI data has been released by the Office of the Economic Advisor in the Ministry of Commerce and Industry.

The final and the provisional inflation estimates during the 11-week period showed a difference of as high as 71 basis points for the week ended September 16. The average gap for this period worked out to about 25 basis points.

During the last year, while the provisional inflation rate breached the upper limit of the RBI's inflation projections of 5.5 per cent only on December 30, the final estimates reveal that this level had actually been breached way back on October 21 and then again on November 18.

Going by the observed gap between the `final' and the `provisional' WPI inflation figures, there is a possibility that the actual inflation rate may have crossed the six per cent mark much before January 6, as the provisional figures suggest.