Inflation up at 5.6%

Rising prices of diesel and petrol pushed up inflation to a 29-week high of 5.63 per cent for the week ended December 20. The inflation rate will go up further in subsequent weeks on account of fuel price rise, effected on December 31,2003.

The rising trend in inflation is against the Reserve Bank of India's forecast of 4 per cent to 4.5 per cent inflation for the year.

The hike in fuel prices negated the effect of falling prices of vegetables, edible oils and textiles, pushing the Wholesale Price Index (WPI)-based inflation up 0.06 per cent over the previous weeks level of 5.57 per cent. The general price level was 3.34 per cent in the corresponding week last year.

The inflation rate, based on the final index for the week ended October 25, has been revised upwards to 5.13 per cent as against the provisional level of 4.96 per cent reported earlier.

At a disaggregated level, the index for primary articles fell 0.5 per cent, while that for manufactured products fell 0.1 per cent. The index for the major group of fuel, power, light and lubricants was up by almost 1 per cent during the week.

The index of primary articles fell due to a sharp 0.7 per cent dip in the prices of food articles and a marginal 0.1 per cent fall in non-food item prices. The prices of poultry chicken, marine fish and vegetables fell 4 per cent each, sunflower and raw cotton fell 2 per cent each.

Prices of raw silk, however, went up 7 per cent, raw skins 4 per cent and raw hides 3 per cent during the week.

The index for fuel, power, light and lubricants went up on account of a 5 per cent hike in the price of high-speed diesel and 3 per cent in petrol. Prices of naphtha and furnace oil fell 1 per cent each.

The index of manufactured products was down 0.1 per cent due to lower prices for food products and textiles, even as paper and transport equipment became costlier.