India’s inflation, as measured by wholesale price index (WPI), stood at 8.84 per cent for the week ended November 15 this year, as compared to 8.9 per cent in the previous week. Inflation was at 3.35 per cent during the corresponding week of last year.
The index number for two categories — primary articles and manufactured goods — increased on a week-on-week basis, reflecting general increase in price levels. However, index number for the fuel group remained unchanged between November 1 and 15, though crude oil prices continued to fall in this period.
“Given the severity of global commodity prices going down, we may reach Reserve Bank of India’s (RBI’s) comfort zone by March 2009,” said D K Joshi, economist with Crisil Ltd, a ratings and analysis firm. The RBI has predicted inflation rate to come down to 7 per cent by end of this fiscal, but its comfort zone is inflation around 5 per cent level.
The annual rate of inflation for food articles went up by 62 basis points (one basis point is one-hundredth of a percentage point) to 9.93 per cent for the week ended November 15, 2008, as compared to 9.31 per cent in the previous week.
However, Surjit S Bhalla, managing director of Oxus Research and Investments, a Delhi-based economic research firm, said, “Inflation is not a problem. The government should cut the key interest rates.”