The Hindu Business Line : Inflation rate drops to 8% on cheaper food items

New Delhi, Dec 11 The annual Wholesale Price Index-based inflation rose 8 per cent during the week ended November 29, lower than the previous week’s annual rise of 8.40 per cent, Government data showed on Thursday. The annual inflation rate was 3.89 per cent during the corresponding week of the previous year.

Cheaper fruit

Inflation dropped to a seven-month low during the latest reported week on account of a across-the-board drop in the price levels, with staples such as fruit, vegetables and barley showing a sharp decline. Inflation is expected to fall further once the data starts capturing cuts in fuel prices announced last week by the Government.

During the latest reported week, the WPI for “All Commodities” declined by 0.04 per cent to 233.6 points, from 233.7 points for the previous week.

In all the major commodity groups, the annual year-on-year inflation has declined compared to the previous week.

Primary articles

In the ‘primary articles’ group, the rate of inflation decreased to 11.66 per cent, compared with 11.98 per cent reported last week, with the annual rate of inflation for ‘Food Articles’ at 10.52 per cent during the latest week compared with 10.48 per cent the previous week.

Fuel, power

In the ‘fuel and power’, group, the inflation rate declined further to 4.48 per cent in the current week compared with 5.28 per cent reported in the previous week. In the case of ‘manufactured products’, the inflation rate in the current week decreased to 7.86 per cent, compared with 8.15 per cent in previous week.

The major articles that account for the decline in prices in the current week include vegetables, sugar, unrefined edible oil, raw rubber and lead ingots.

An analysis by the Government of the contribution of commodity groups to year-on-year inflation rate for the latest reported week showed that primary articles covering food, non-food and minerals accounted for 33.2 per cent of inflation, which is 11 percentage points more than their contribution to the WPI basket.

For the week ended October 4, the final WPI for ‘All Commodities’ stood at 239.7 points as compared to the provisional estimate of 239.6 points, while annual rate of inflation based on final index, calculated on point to point basis, stood at 11.49 per cent as compared to the provisionally reported 11.44 per cent.