Driven by the rising prices of essential food items like cereals, tea, spices and fruit and vegetables, inflation inched up to 0.61 per cent for the week ended May 9.
Besides, the manufactured goods like sugar, gur, imported edible oil, steel ingots and synthetic yarn too became dearer during the week which witnessed inflation move by 0.13 per cent from 0.48 per cent in the previous week.
The rate of price rise a year ago, however, was as high as 8.57 per cent. This is the 10th week in a row when inflation stood below the one per cent mark indicating softer instance towards interest rate.
Many banks have already lowered their interest rates in response to softer monetary stance. Going forward rates could further come down if inflation remains below two per cent. "There is room for for cutting rates if inflation remains low during the year," said PNB Chairman and Managing Director K C Chakrabarty.
According to economic think-tank Centre for Monitoring Indian Economy (CMIE), the average inflation during 2009-10 is projected to remain negligible at just 0.1 per cent as against 8.3 per cent in 2008-09. Prices of fuel products and manufactured goods are expected to see a fall while inflation in primary articles will remain firm during the current fiscal, economic think-tank Centre for Monitoring Indian Economy (CMIE) said.
Year-on-year, prices of cereals went up more than 12 per cent, pulses 14.8 per cent, and fruit and vegetables 9 per cent. At the same time, the prices of milk have gone up nearly 6.4 per cent over last year, while spices were more expensive by about 7.1 per cent.
Among manufactured food products, processed fish turned dearer by more than 42.7 per cent over the last year and sugar, khandsari and gur went up about 28.4 per cent.
During the week, tea was costlier by 11 per cent, ragi 4 per cent, bajra 3 per cent, spices 2 per cent. At the same time, rice, wheat, masur, arhar and fruit and vegetables were each expensive by one per cent each.
Among manufactured products rice bran oil was expensive by 4 per cent, oil cakes by 2 per cent and gur, imported edible oil, and gingelly oil by 1 per cent each. However, the prices of sooji, coconut oil and maida declined by two per cent each while salt and atta got cheaper by one percentage point.
At the same time, steel ingots became expensive by 7 per cent, synthetic yarn by 4 per cent, lead ingots 3 per cent and zinc ingots 2 per cent. However, newsprint prices declined by 2 per cent. Inflation for the week ended March 14 was revised upwards to 0.71 per cent from 0.27 per cent as estimated provisionally.
