Inflation static at 7.1%

Wholesale price index (WPI) based inflation remained unchanged at the previous weeks level of 7.1 per cent. Lower prices of primary articles ensured that the inflation level for the week ending October 16 remained static despite a hike in prices of fuel and manufactured items.

Inflation, which was 5.13 per cent in the corresponding week last year, had been falling for three weeks after a series of fiscal and monetary measures taken by the government and Reserve Bank of India.

The inflation rate based on the final index for the week ending August 21 was revised upwards to 8.46 per cent as against the provisional level of 8.17 per cent reported earlier.

"Though the government has already taken steps to moderate inflation, still one cannot say I am happy. We are closely watching the price situation and irrational price behaviour in commodities," Finance Minister, P Chidambaram said on the sidelines of a function that marked the 10th anniversary of the National Stock Exchange in Mumbai.

Though inflation was firm in the latest reported week, certain commodities like vegetables and fruits, some edible oils, ghee and processed tea became cheaper.

At the disaggregated level, the index for primary articles fell by 0.3 per cent on account of a 0.7 per cent decline in prices of non-food articles and a 0.2 per cent fall in food article prices.

The inflation rate based on the All India Consumer Price Index for Industrial Workers (CPI-IW) was 4.81 per cent in September 2004 as against 2.89 per cent during September 2003. The inflation level was 4.61 per cent in August 2004.

The index with base 1982=100 recorded a marginal increase of one point during September 2004 to stand at 523.

The increase in the index was on account of increase in prices of wheat and wheat flour, mustard oil, groundnut oil, sugar and kerosene oil.

At the disaggregated level, the index for primary articles fell by 0.3 per cent on acount of a 0.7 per cent decline in prices of non-food articles and a 0.2 per cent fall in food article prices.

Prices of fuels rose by 0.2 per cent due to a 4 per cent hike in furnace oil prices and 2 per cent rise in naptha prices. Prices of manufactured products rose by 0.1 per cent during the week in question.

Within the primary articles group, prices of raw cotton and marine fish fell by 4 per cent, of raw tobacco and raw silk by 2 per cent each and of sugarcane by 1 per cent. There was a 1 per cent hike in prices of castor seed, grondnut seed gingelly seed copra and safflower seed.

In the manufactured products category, food product prices rose 0.1 per cent due to a 5 per cent fall in prices of tea and oil cakes, gur prices fell 2 per cent and ghee, imported edible oil and hydrogenated vanaspati prices fell by 1 per cent each. There was howerver a 13 per cent hike in prices of unblended black tea leaf.

The index for paper and paper products rose by 0.5 per cent on account of a 4 per cent rise in newspaper prices and the index for machinery and machine tools rose by 0.5 epr cent due to a steep 17 per cent hike in prices of rubber insulated cables and 12 per cent rise in other cable prices. The index for transport and transport equipment rose by 0.3 epr cent dur to a 6 per cent rise in bicycle prices.