The Hindu Business Line : Inflation rate drops to lowest in six months

The dip in the year-on-year inflation rate to a single digit level, after 21 consecutive weeks in the double digits, was on account of an all-round decline in price levels led by a sharp decline in annual inflation in the fuels category.

Our Bureau

New Delhi, Nov 13 Inflation dropped to its lowest levels in nearly six months in early November as price levels in the case of both metals and fuels showed a sharp decline.

The annual Wholesale Price Index-based inflation rate was at 8.98 per cent during the week ended November 1, sharply below the previous week’s annual rise of 10.72 per cent, government data showed on Thursday. The dip in the year-on-year inflation rate to a single digit level, after 21 consecutive weeks in the double digits, was on account of an all-round decline in price levels led by a sharp decline in annual inflation in the fuels category.

It was the lowest reading since May 24, when the rate was 8.90 per cent and well below early August’s peak of 12.91 per cent.

The WPI for the latest reported week declined by 1.26 per cent to 235.5 points, down from 238.5 points the previous week.

Inflation in the corresponding week a year ago (week ended November 3) at 3.35 per cent, however, was significantly lower.

Primary articles

In the ‘Primary Articles’ group, the annual inflation declined to 11.01 per cent during the latest reported week, as compared to 11.41 per cent during the previous week. Out of a total of 98 articles, 20 articles showed a decline in prices in the latest reported week as compared to the previous week. These included wheat, maize, urad, ragi, papaya, brinjal, okara, peas, sweet potatoes, sapota, groundnut, gingelly and castor seeds, dry chillies, corriander, cardamoms, tea, iron ore and raw rubber. Another 61 articles have shown no increase in prices.

Fuel, power

In the commodity group ‘Fuel, Power, Light and Lubricants’, the year-on-year rate of inflation sharply declined to 9.22 per cent during the latest reported week, compared to an inflation of 14.09 per cent reported in the previous week. Prices of four commodities declined and, for other 14 commodities, it remained unchanged. Prices of bitumen, however, witnessed an increase of 1.72 per cent in the latest reported week.

In the case of the ‘Manufactured Products’, rate of inflation in the latest reported week further declined to 8.06 per cent, as compared to 9.09 per cent in previous week. Out of 318 commodities, a large number, 284 in all, have shown no increase in prices over the last week.

In the case of 23 commodities, there has been a decline in prices.

These commodities included among others, groundnut, cottonseed, rice bran, gingelly, imported and unrefined edible oils; deoiled cake; foundry and basic pig iron; CR coils, sheets, bars and rods; billets and slabs, blooms, steel sheets and plates and other steel items; lead and zinc ingots; and PVC pipes and tubes. Only 11 products, particularly groundnut cake, cattle feed, ceramic tiles, kraft paper, heavy and light structurals, blasting powder, tooth paste , gur, ball bearings and wires witnessed an increase in prices.

Inflation in case of 30 essential commodities increased to 7.74 per cent as on the week ending November 1, from 7.51 per cent reported in the earlier week.

There was a decline in the prices of five of these commodities and prices of other 16 commodities remained unchanged.

Prices of remaining nine items — rice, jowar, bajra, gram, arhar, masur, potatoes, mutton, and gur — witnessed some increase.

Final inflation for the week ended September 6 was, however, revised up to 12.42 per cent from the provisional WPI-based estimate of 12.14 per cent.

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