Annual inflation rate shoots up to 4.5 per cent
NEW DELHI, January 4: Annual inflation based on wholesale prices shot up to 4.47 per cent for the week ended December 20 as primary food articles and manufactured food products became dearer.The inflation went up by 0.53 percentage points during the week to end at 4.47 per cent (provisional) compared to 3.94 per cent in the previous week and 7.81 per cent in the corresponding week of last year. Annual inflation has been following an upward trend,barring minor fluctuations, ever since it touched an 11- year low of 3.20 per cent on November 8. In the last six weeks alone, inflation has gone up by more than 1.25 percentage points. During the week, the wholesale price index (WPI) for "all commodities" (base 1981-82=100) increased by 0.6 per cent to 334.5 from 332.5 in the previous week. The upsurge in inflation during the week has been mainly on account of 2.3 per cent increase in primary food articles and 1.0 per cent increase in manufactured food products, which together account for 27.59 per cent of
the total weight in WPI, during the week. Among primary food items, prices of tea went up by 10 per cent, gram by 6 per cent and gur, wheat, urad and vegetables by 4 per cent each. Meanwhile, inflation based on the final index fell to 4.0 per cent for the week ended October 25 (the latest available) from 4.6 per cent in the previous week and 3.5 per cent in the corresponding week on provisional index. The final index for all commodities for the week also fell to 331.6 from the previous week's level of 331.9. The index was at 329.8 during the corresponding week on provisional index. Economists have been suggesting that inflation would go up in the second half of the current financial year as the economy comes out of the slump. The low levels of inflation has been attributed to a slackening of demand due to the slowdown in the economy. The low demand in the economy is quite evident from the fact that during last year most of the increase in prices have been in commodities under administered price
mechanism (APM). During the year, prices of commodities in "fuel, power,light and lubricants" group, which are mostly under the APM, rose sharply, while those in "primary articles" and "manufactured products" groups have remained subdued. While prices of commodities under fuel, power, light and lubricants increased by 12.96 per cent during last one year, prices of primary articles and manufactured products have gone only by 2.40 per cent and 4.00 per cent respectively. During the week under reference, the commodities which have witnessed significant price movements were; mesta (down 15 per cent), raw rubber and steatite (down 10 per cent each), raw hides (down 7 per cent), soyabean (down 4 per cent), collapsible tubes (up 13 per cent), lac (up 11 per cent), agarbati (up 7 per cent), talcum powder (up 6 per cent) and ports and poles (4 per cent). The index for primary articles rose by 1.3 per cent to 345.9 from 341.3 on account of increase in the index of "food articles." The index for food articles,
went up by 2.3 per cent to 395.3 from 386.6 as the prices of tea (10 per cent), gram (6 per cent), wheat, urad and vegetables (4 per cent each), fish and fruits (3 per cent each), maize, arhar, masur and eggs (2 per cent each) and jowar, moong and condiments and spices (1 per cent each) increased. Price of mutton (1 per cent) went down during the week from food articles.In the week, the index for "non-food articles" went down marginally by 0.1 per cent to 346.5 from 346.7 due to fall in prices of mesta (15 per cent), raw rubber (10 per cent), raw hides (7 per cent), soyabean (4 per cent), copra (2 per cent) and raw skin (1 per cent). However, from non-food articles, prices of lac (11 per cent), fodder (3 per cent) and raw silk and gingelly seed (1 per cent each) appreciated during the week. The index for the third sub-group in primary articles, "minerals" moved up by 0.1 per cent to 166.7 from 166.6 as the prices of chromite (2 per cent) and steatite (10 per cent) went up and down respectively. The
index for fuel, power, light and lubricants remained unchanged at 377.4 for the fourth consecutive week. The index for the third major group, manufactured products increased by 0.3 per cent during the week to 320 from 319.1 in the week before. Under the group, index for "food products" rose by 1.0 per cent to 323.7 from 320.5 due to increase in prices of gur (4 per cent), suji, solvent extracted groundnut oil and rice bran oil (2 per cent each) and atta, bran, gingelly oil, rape and mustard oil and coconut oil (1 per cent each). Price of oil cakes (1 per cent) went down from the sub-group. The index for "textiles" increased by 0.2 per cent to 313.6 from 312.9 as the prices of jute, hemp and mesta textiles (3 per cent) went up, while the index for paper and paper products fell by 0.1 per cent to 369 from 369.3 due to fall in prices of straw and mill boards (1 per cent).
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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