Inflation dips to 5.32%

The rate of inflation, for the week ended February 28, fell by 62 basis points to 5.32 per cent from 5.94 per cent in the previous week.

Reserve Bank of India (RBI) Governor Y V Reddy's assertion that inflation will at least fall below the 5-5.5 per cent mark "" which was the central bank's initial forecast for March "" may gain credibility.

The finance ministry, last week, had said the RBI's year-end estimate of 4-4.5 per cent was unlikely to be met. The decline was driven by a fall in the prices of primary items, including fruits and vegetables, and non-food items.

The inflation rate was 5.49 per cent in the corresponding period last year. The inflation for week ended January 3 was revised upwards by 64 basis points to 6.45 per cent against the provisional level of 6.09 per cent.

The final Wholesale Price Index (WPI) stood corrected at 178.3 points compared with the provisional figure of 177.7 points.The WPI, however, stood unchanged at the previous week's figure of 180 points with fuel prices remaining firm for the fifth consecutive week, as compared with 170.9 points in the previous year.

With food and non-food items becoming cheaper, the index of primary articles' group declined by 0.3 per cent to 182.6 points in the latest reported week as compared with 177.2 points during the corresponding period in 2002-03.

Food articles' group index declined by 0.2 per cent to 180.6 points due to the fall in prices of eggs (5 per cent), ragi (3 per cent), jowar (2 per cent) and maize, masur, barley, gram, fruits and vegetables (1 per cent each).

However, the price of poultry chicken rose by 3 per cent, while that of fish-marine, bajra, condiments and spices rose by 1 per cent each.

The index of non-food articles' group was down by 0.4 per cent to 193 points due to lower prices for cotton seed (3 per cent), raw silk, copra and gingelly seed (2 per cent each) and soyabean and groundnut seed (1 per cent each), even as there was a 6 per cent hike in mesta price and 1 per cent rise in raw jute.

The index for fuel, power, light and lubricants' stood firm at 263.3 points as compared with the previous year's index of 252.7 points. The index of heavy-weighted manufactured products group rose by 0.1 per cent to 160.5 points due to costlier food products, rubber and plastic products, chemicals, non-metallic minerals and transport equipment. The index was 150.4 points in the year-ago period.

The group Food products' group index rose by 0.2 per cent to 172.4 points due to the price rise in ghee (3 per cent) and sunflower, oil, sugar, rapeseed and mustard oil (1 per cent each).

Prices of gur, solvent and extracted groundnut oil declined by 2 per cent each whereas that of cotton seed oil, imported edible oil and groundnut oil fell by 1 per cent each.