In another attempt to calm down the hype and panic surrounding inflation, the government has now made a comparison of India?s consumer price index (CPI)-based inflation with similar economies like BRIC (Brazil, Russia, China) countries and developed economies like the US and European Union.

A senior official in the department of industrial policy and promotion (DIPP) told FE that a comparison of the data on these countries? inflationary trends shows that the percentage variation of consumer price inflation of March 2008 over March 2007 was the least in India at 17.9%.

Interestingly, among the BRIC countries, China?s percentage variation in CPI-based inflation during the said period was the maximum with 151.5%. Russia followed with 79.7%, while Brazil was next with a variation of 56.6%. The percentage variation showed by the US and the Eurozone were also above India with 42.9% and 33.3% respectively.

Crisil principal economist DK Joshi said, ?In India, food inflation has not been that high as compared to China . Also, while we have been suppressing fuel price increase, other countries may be passing it on to the consumers. Inflation has been late in visiting India, but in the items that we have imported, we have seen higher inflation.?

However, he added that India?s data does not adequately reflect price rise as it has been subjected to too many revisions. ?It is important to capture the data adequately and on time,? Joshi said.

For instance, the sample survey on the housing component of CPI is updated only once in every six months (in January and in July) and is kept constant for the following five months in the year. ?Not all components are updated regularly. There are a lot of inherent issues regarding India ?s CPI,? said an analyst, who did not want to be named.

Sonal Varma, economist at Lehman Brothers, said while the CPI inflation for April was 7.8%, it is expected to rise to 9% by September. The average CPI inflation for calender 2007 was 6.4% as against the projected 8.3% for calender 2008, while the average CPI inflation for FY 2008 was 6.2% as against the projected 8.9% for FY 2009, she added.

The government has been desperately trying to stifle inflationary expectations by promising more administrative and fiscal steps. Last month, minister of state for industry Ashwini Kumar had claimed that the measures taken by the government to check prices, a normal monsoon and record harvest?would bring inflation down to around 6.4-6.6% by July.

However, causing more worry for the government, WPI-based inflation continued its relentless rise and touched a three-and-a-half year high of 8.1%, for the week ending May 17 from 7.82% in the previous week.

Incidentally, an International Monetary Fund (IMF) study demonstrated that the rate of inflation had in fact fallen significantly in April on a week-on-week basis as against the increasing trend if seen on a year-on-year basis.

The IMF showed that week-on-week inflation from April 3 to May 5 was only a little above 0% as against year-on-year rate of inflation of over 7% during the same period. The report had noted ?contrary to the impression given by the year-on-year numbers, WPI inflation is actually beginning to slow down quite dramatically on week-on-week basis.?