The Hindu Business Line : Inflation rate dips to 5.74% on cheaper mineral, food items

Price lines
Wholesale price index rose by 0.1 per cent to 210 points
Prices of ragi, bajra, pulses, pork, milk, masur rose while those of condiments, spices, fish marine decline

New Delhi April 13 The annual wholesale price index-based inflation rate rose 5.74 per cent during the week ended March 31, well below the previous week's annual increase of 6.39 per cent.

The point-to-point inflation rate was down mainly as non-metallic minerals, metals and primary food article saw a fall in prices during the latest reported week. The WPI (base 1993-94), on which inflation data is based, rose by 0.1 per cent to 210 points during the week from 209.8 in the previous week.

Inflation was at 3.98 per cent during the corresponding week of 2006.

This is for the first time in the last 11 weeks that inflation has fallen below the six per cent mark. Inflation crossed the six per cent mark in the first week of January and went on rising after that. It stabilised at 6.46 per cent in the three weeks ended March 10, came down a tad to 6.39 per cent in the following week and has now fallen further considerably.

Despite the fall, inflation during the latest reported week was still above RBI's upper limit of 5.5 per cent for 2006-07. Inflation had averaged 4.46 per cent during 2005-06.

During the latest reported week, while prices of pulses, pork, ragi, bajra, milk, masur, gram, vegetables, raw rubber and soyabean rose, those of condiments, spices, fish marine, castor seed, copra, cotton and coconut oil saw a decline in prices.

The decline in inflation would also give some respite to the Government, which has been struggling hard to bring down inflation within RBI's tolerance band of 5-5.5 per cent.

Vegetables dearer

During the week, prices of pork increased by 11 per cent, while ragi and bajra became expensive by two per cent each and milk masur and gram by one per cent each. Vegetables were dearer by 0.6 per cent. Among fuel category, naphtha became costlier by three per cent and furnace oil one per cent.

Among manufactured items, coconut oil was cheaper by three per cent, hessian and sacking bags by five per cent. Prices of cement declined by one per cent. Another construction material -- building bricks - was cheaper by two per cent. Prices of automobile cables rose by 21 per cent, medical x-ray films by 12 per cent and carbon black by six per cent.

The Government also revised the inflation rate for the week ended February 3 to 6.58 per cent from 6.73 per cent estimated provisionally. The Government revises the inflation rate after a delay of two months on additional price data.