The Hindu Business Line : Inflation rate drops on cheaper non-food items

Indicators
The Primary Articles’ group index rose by 0.5% to 224.7 points
The Manufactured Products’ group declined 0.1% to 185.6 points
The Rubber and Plastic Products’ group declined by 0.1% to 154.5 points

Our Bureau

New Delhi, Sept. 7 The annual Wholesale Price Index–based inflation rose 3.79 per cent during the week ended August 25, lower than the previous week’s annual rise of 3.94 per cent. The dip in the year-on-year inflation rate was mainly due to a decline in prices of some primary articles, especially non-food items, and certain manufactured products, Government data showed on Friday.

16-month low

Inflation during the latest reported week is at its lowest level since it hit 3.70 per cent in the week ended April 15, 2006. The annual inflation rate was at 5.27 per cent during the corresponding week of the previous year.

The current inflation is well below the level projected by the RBI for the current fiscal. The RBI has a target to contain inflation at close to five per cent during 2007-08 and bring it down to 4-4.5 per cent over the medium-term. The Finance Minister, Mr P. Chidambaram, had earlier said the Government aims to keep inflation rate close to four per cent. He had also said there could be pressure on food prices until production of wheat, rice and pulses was stepped up.

The Wholesale Price Index of all commodities decline by one per cent to 224.5 points from 224.7 the previous week.

Tanning items dearer

On a disaggregated basis during the latest reported week, the Primary Articles’ group index rose by 0.5 per cent to 224.7 points, with the index for Food Articles’ group rose by 0.9 per cent to 223.7 points due to higher prices of fish-inland (5 per cent), masur (2 per cent) and milk, fruits and vegetables, bajra and gram (1 per cent each).

However, the prices of moong (2 per cent) declined. The index for Non-Food Articles’ group declined by 0.1 per cent to 209.7 points, from 210 points for the previous week, due to lower prices of raw cotton, castor seed and groundnut seed (1 per cent each).

However, the prices of tanning materials (77 per cent), hides (raw) (18 per cent), linseed and skins (raw) (4 per cent each), sunflower and niger seed (2 per cent each) and copra (1 per cent) moved up.

Manufactured products

The Manufactured Products’ group declined 0.1 per cent to 185.6 points, with the index for Food Products’ group down by 0.2 per cent to 186.3 points due to lower prices of rice bran oil and imported edible oil (2 per cent each) and cotton seed oil, khandsari and oil cakes (1 per cent each). However, the prices of groundnut oil (1 per cent) moved up.

The index for Rubber and Plastic Products’ group declined by 0.1 per cent to 154.5 points due to lower prices of decorative laminates (3 per cent). The index for Chemicals and Chemical Products’ group rose by 0.1 per cent to 202.2 points due to higher prices of acid (all kinds) and titanium dioxide (5 per cent each), PVC resins and super phosphate (3 per cent each) and caustic soda (sodium hydroxide) (1 per cent).

However, the prices of benzene (3 per cent), liquid chlorine and resins (2 per cent each) and purified terephthalic acid (1 per cent) declined.

Base metals

The index for Base Metals Alloys and Metal Products’ group rose marginally to 243.8 points from 243.7 points for the previous week due to higher prices of MS bars and rounds (3 per cent) and zinc, foundary pig iron and basic pig iron (1 per cent each).

However, the prices of zinc ingots (3 per cent) and lead ingots (1 per cent) declined.