Inflation Dips Further To 5.83 Per Cent

The annual rate of inflation based on wholesale price index (WPI) declined by 0.1 percentage points to 5.83 per cent for the week ended June 7.

The steady decline in inflation is mainly due to fall in prices of primary articles over the last three months. The prices of vegetables have plunged 20.72 per cent since February.

The annual inflation (provisional), calculated on a point-to-point basis, eased to 5.83 per cent in the reference week from 5.93 per cent the week before. The rate of inflation during the corresponding week last year was 4.52 per cent.

The rate of increase in prices has been continuously dipping over the last few months and has shed over two percentage points from a high of eight per cent in Febraury.

Meanwhile, the official WPI for `all commodities' (base 1981-82-100) fell to 323.2 (provisional) during the week under review against 323.5 (provisional) the week before.

The annual rate of inflation based on the final index for the week ended April 12, 1997, stood at 6.6 per cent, the same as for the week based on provisional index.

Compared to the 5.83 per cent inflation in all commodities, the inflation in primary articles during the year was only 3.31 per cent, while inflation in `manufactured products' was 5.05 per cent.

Had it not been for a 18.25 per cent increase in the index for other major group, `fuel, power, light and lubricants' during the year, the overall inflation would have been much less than 5.83 per cent.

Interestingly, inflation based on consumer price index for industrial workers (CPI-IW) is still much higher at 9.3 per cent in April (latest available) compared to 6.6 per cent for the month based on WPI.

During the reference week, among the various major WPI groups, index for primary articles declined by 0.5 per cent to 330.9 from 332.4 for the previous week. While indices for fuel, power, light and lubricants remained unchanged at its previous week's level and manufactured products went up by 0.1 per cent.

Among the commodities which witnessed substantial fluctuations during the week are: PVC resins and pipes and tubes (up by 5 per cent each) and raw silk (down by 7 per cent), masur and maida (down by 6 per cent each), fodder and atta (down by 5 per cent each) and bajra, ragi and suji (down by 4 per cent each).

Among primary articles, the index for `food articles' declined by 0.7 per cent to 376.7 compared to 379.2 for the previous week due to lower prices of masur (-6 per cent), bajra and ragi (-4 per cent each), and rice, wheat and maize (-1 per cent each). However, prices of eggs (3 per cent), fish (2 per cent) and poultry chicken (1 per cent) went up compared to the previous week. The index for `non-food articles' also declined by 0.2 per cent to 334.5 from 335.2 due to lower prices of raw silk (-7 per cent), fodder (-5 per cent), sunflower (-3 per cent), gingelly seed and raw rubber (-2 per cent each) and linseed (-1 per cent).

Prices of copra (2 per cent) and raw cotton and groundnut seed (1 per cent each) rose compared to the previous week.

The index for `fuel, power, light and lubricants' group remained unchanged at its previous week's level of 349.2.

The index for the group `manufactured products' rose by 0.1 per cent in the reference week to 313.9 from 313.7 for the previous week.

Under the group, the index for `food products' declined by 0.3 per cent to 317.6 from 318.5 for the last week due to lower prices of maida (-6 per cent), atta (- 5 per cent) and suji (- 4 per cent). However, price of oil cakes (3 per cent), biscuits (2 per cent) and gur, solvent extracted groundnut oil, coconut oil and groundnut oil (1 per cent each) increased.

The index for textiles rose by 0.3 per cent to 306.9 from 305.9 for the last week due increase in the price of cotton hosiery (3 per cent).

The index for