The inflation in India continues to march southwards and slipped to a 14-month low in mid-February on the strength of cheaper fuel prices and the analysts expect that now it has reached under comfortable zone and is providing the scope to Reserve Bank of India to make another round of cut in interest rates soon to boost demands and push back sluggishness.
According to latest release of Wholesale Price Index, the annual rate of inflation, calculated on point-to-point basis, has slipped to 56 basis points from 3.92% for the week ended for February 07 to 3.36% for the week ended for Feb 14.
This week’s data was lowest since Nov 24, 2007 when inflation stood at 3.11%. For the same corresponding week of the previous year (Feb 16, 2008), it was at 5.66%.
The index for ‘Primary Articles’ group which has a weightage of 22.02% and covers ‘Food Articles’ group, ‘Non-Food Articles’ group and ‘Minerals’ group rose by 1 basis point on the back of higher prices of magnesite (83%), barytes (38%), ochre (25%), iron ore (6%), chromite (3%) and steatite (1%) in ‘Minerals’ group.
The major commodities that became cheaper are: maize (5%), barley (3%), fruits & vegetables (2%); and eggs, condiments & spices and mutton (1% each); oil cakes and rape & mustard oil (2% each); and gingelly oil, sooji (rawa), coconut oil and rice bran oil (1% each).
On the contrary, the commodities which price became higher are: arhar (6%), fish-marine (4%), ragi (2%) and bajra, jowar and urad (1% each); prices of bran (all kinds) (3%) and imported edible oil and sugar (1% each); niger seed (12%), linseed (10%) and cotton seed (2%).
The annual rate of inflation for the week ended on Dec 20, 2008 was based on final index, calculated on point to point basis, stood at 5.91% as compared to 6.38% (Provisional) reported earlier vide press note dated Jan 01, 2009.
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