In January, WPI-based inflation eased to a three-year low of 6.62 per cent, against 7.23 per cent in the corresponding month last year. At 10.79 per cent, the consumer price index (CPI)-based inflation, however, continued to be high; in the year-ago period, it was 7.65 per cent.
The Economic Survey 2012-13 said economists felt for policy matters, CPI-based inflation should be considered, as it had a greater impact on the common man.
The Survey added, "Food inflation has been particularly elevated over this period, contributing to an average of a third of total inflation." Food inflation, based on WPI, stood at 9.05 per cent in the quarter ended December. In the same period, CPI-based food inflation was 12.1 per cent.
On ways to control the rise in prices, the Survey said, "Apart from monetary policy attempting to control demand, supply-side responses will be necessary to bring down inflation in a sustained way. Ongoing policy initiatives need to be pursued." In the long run, measures to increase supply were the only road to non-inflationary growth, it added.