The annual rate of inflation plunged to a 52-week low at 4.70 per cent for the week ended July 5 from 5.9 per cent in the previous week, despite no major fluctuations in prices during the week.
This sharp decline, which came on expected lines, was due to the 'wearing off' of the direct effect of last July's petroleum price hike on inflation.
Since inflation is calculated on a point-to-point basis, the government is now, ironically, reaping the benefits of a lower rate of inflation on account of the petroleum price hike effected in the first week of July last year.
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The sharp increase in wholesale price index (WPI) in the corresponding week last year due to petroleum prices hike led to the inflation week being calculated on a higher base in the latest week, thus, pulling it down by a massive 1.2 percentage points.
It may be recalled that during the corresponding week last year, the rate of inflation had jumped 1.6 percentage points to 5.8 per cent on account of the petro-product price hike.
The official WPI for `all commodities' (base 1981-82=100) rose 0.2 per cent to 325.0 (provisional) during the week as against 324.5 (provisional) the week before.
The annual rate of inflation based on the final index for the week ended May 10, 1997, stood at 5.9 per cent, as against 6.0 per cent for the week based on provisional index.
Compared to the 4.70 per cent inflation in all commodities, the rate of increase in price of `primary articles' was 4.03 per cent, while in `manufactured products' and `fuel, power, light and lubricants', it was 4.35 per cent and 8.45 per cent.
During the reference week, the increase in prices of the group, fuel, power, light and lubricants came drastically down to 8.45 per cent from 18.25 per cent during the previous week.
Interestingly, the rate of price rise based on consumer price index for industrial workers (CPI-IW) also fell from 9.3 per cent in
April to 7.32 per cent in May when WPI-based inflation was six per cent.
During the week among the various major groups, index for primary articles rose by 0.3 per cent to 335.6 from 334.6, fuel, power, light and lubricants remained unchanged at its previous week's level and manufactured products rose marginally.
Among the commodities which saw substantial fluctuations during the week were: masur (down 7 per cent), raw jute (down 6 per cent), bran (up 8 per cent), copra (up 5 per cent) and bajra and coconut oil (up 4 per cent each).
Among primary articles, the `food articles' index rose 0.5 per cent to 384.8 per cent from 382.7 due to costlier bajra (4 per cent), ragi and tea (3 per cent each) and wheat, fruits and vegetables, eggs, poultry chicken and pork (1 per cent each).
However, prices of masur (-7 per cent), arhar (-3 per cent) and barley, gram and fish (-1 per cent each) softened during the period under review.
The index for `non-food articles' eased by 0.2 per cent to 335.6 from 336.2 due to lower prices of raw jute (-6 per cent), raw rubber (-4 per cent), soyabean (-2 per cent) and raw cotton (-1 per cent).
Prices of copra (5 per cent), sunflower (3 per cent), raw silk (2 per cent) and gingelly seed (1 per cent) moved up.
While the index for fuel, power, light and lubricants group remained unchanged at its previous week's level of 349.2, that of manufactured products stood at 314.5 as compared to 314.2 due to higher prices for textiles and non-metallic mineral products.
The index for `food products' rose by 0.3 per cent to 320.4 from 319.3 due to increased prices of bran (8 per cent), coconut oil (4 per cent) and gur (2 per cent). However, prices of suji (-3 per cent), atta, khandsari and rape and mustard oil (-2 per cent each) and maida and oil cakes (-1 per cent) went down.
In `textiles', the index increased marginally to 305.4 from 305.3 due to firming up of prices of polyester staple fibre (2 per cent) and filament yarn synthetic (1 per cent).
The `chemicals and chemical products' index went down marginally to 269.5 from 269.6 due to decline in prices of caustic soda, pvc resins, castor oil and linseed oil (-1 per cent each). Price of dyestuffs and indigo (1 per cent) went up.
The `non-metallic and mineral products' index was up by 0.1 per cent to 348.0 from 347.7 due to marginal increase in the price of cement.
The indices for all other group remained unaltered at their respective previous week's level.