Inflation eased marginally in April to 8.7 per cent. In the short-term, though, inflation is expected to creep up again given the petrol price hike done earlier this week and the possibility of an increase in diesel prices in the coming days.
Headline inflation, based on the annual Wholesale Price Index, surged 8.66 per cent in April, lower than the 9.04 per cent year-on-year rise reported in March. The data released by the Ministry of Commerce and Industry on Monday has another warning signal in terms of a sharp revision in February’s final inflation estimate to 9.54 per cent, up from the 8.31 per cent reported provisionally.
For April, the slide in the provisional data comes on the back of moderation in prices of some food items. However, inflation for manufactured products and the fuel and power index continue to climb.
According to the data, food inflation, which accounts for nearly 15 per cent of overall WPI inflation, rose 7.70 per cent on a year-on-year basis for the week ended April 30. The primary articles index, which includes food, non-food articles and minerals, surged by 12.05 per cent on an annual basis.
Among primary articles, food items went up by 8.71 per cent, while non-food primary articles rose by over 27 per cent. Minerals were up by 7.41 per cent on a year-on-year basis. During the month, fuel and power prices went up by 13.32 per cent, driven mainly by a 21.81 per cent rise in petrol prices and an 11.31 per cent jump in cooking gas (LPG) rates.
On the downward trend, Finance Minister Mr Pranab Mukherjee said he was hopeful prices would come down further in the coming months in the wake of an increase in foodstocks and decline in costs of manufactured items.
Headline inflation has been above 8 per cent since January, 2010. The RBI has already hiked policy rates nine times since March, 2010, to tame demand and curb inflation. In its monetary policy, the RBI had also warned against a rise in prices of core (non-food) items, especially on account of rising global commodity prices.