The Hindu Business Line : Cheaper essential items keep inflation rate static

New Delhi, Sept. 25 The country’s wholesale price index (WPI) based inflation for the week ended September 13 stood at 12.14 per cent, unchanged from the previous week, but much above the Reserve Bank of India’s comfort level. The Central Bank expects inflation for the current year to be about 7 per cent.

Reacting to the inflation numbers released by the Commerce and Industry Ministry here on Thursday, the Finance Ministry said in a statement that inflation continues to remain stable even while noting that it was significantly lower at 3.51 per cent in the same period the previous year.

The statement highlighted that inflation of 30 essential commodities declined to 7.58 per cent as on the week ending September 13, from 7.72 per cent reported in the earlier week. There was a decline in the prices of cereals, pulses, sugar and edible oils.

Primary articles

In the ‘primary articles’ group, the annual point-to-point inflation increased to 11.56 per cent compared with 11.27 per cent reported last week, though it remained lower than 11.83 per cent for the week ending August 9, 2008.

Out of a total of 98 articles, 18 have shown a decline in prices in the current week compared with September 6, 2008. These included, among others, rice, wheat, bajra, jowar, gram, moong, masur, urad, mustard, gingelly and niger seeds, cashew nuts, black pepper, cumin and brinjal. Another 58 articles have shown no increase in prices.

In the commodity group ‘fuel and power’, the rate of inflation remained unchanged at the previous week’s level of 16.66 per cent. Prices of all the 19 commodities remained unchanged in the current week. In the case of ‘manufactured products’, rate of inflation in the current week declined to 10.61 per cent compared with 10.78 per cent in the previous week. Out of 318 commodities, a large number, 286 in all, have shown no increase in prices over the last week.

In the case of 13 commodities, there has been a decline in prices. These commodities include rice bran, cottonseed, coconut, groundnut and imported edible oils; butter and ghee; deoiled cake; sugar; lead ingots; vitamin tablets; synthetic yarn; and electrolytic capacitors.

Manufactured goods

Only 19 products, particularly mustard, unrefined and gingelly oil; cement; groundnut cake; gur and khandsari; texturised yarn; zinc and zinc ingots; synthetic resins; salt and plastic containers witnessed an increase in prices.

Meanwhile, Mr Pronab Sen, Chief Statistician of India, said that the country’s inflation would remain in double-digits until January in part due to higher prices of manufacturing products. “Headline inflation will remain in double digits until January due to base effect and higher prices of manufactured products”, Mr Sen told reporters here. He also supported a proposal to release inflation figures on a monthly basis.

Mr Sen’s remarks on inflation came a day after Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, said that inflation would return to single digits by the end of the current fiscal.

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