India’s annual inflation slips to 8.66 percent in April (Lead)

May 16th, 2011 - 6:31 pm ICT by IANS  

Pranab Mukherjee New Delhi, May 16 (IANS) India’s annual rate of inflation slipped a tad to 8.66 percent in April, compared to 9.04 percent recorded in the previous month, according to official data released Monday.

The fall in inflation was because of a high base recorded in the like month of last year at 10.88 percent.

The provisional annual rate of inflation for February, which was earlier pegged at 8.31 percent, was revised upwards to 9.54 percent.

Inflation figures for March too were revised upwards to 9.04 percent as data for metal products was omitted due to a programming error.

“As a result of this correction, the rate of inflation for March has increased from 8.98 percent announced earlier to 9.04 percent. The rate of inflation for April without the correction would have been 8.53 percent as against 8.66 percent reported in this press release,” the commerce and industry ministry said in a statement.

With inflation at such high levels, another round of interest rate hike by the Reserve Bank of India is expected by economists. The central bank had hiked rates by 50 basis points earlier this month.

“Though inflation has marginally softened in April, it continues to remain sticky and considerably higher than the desired level. There is a worry that with the recently announced fuel price increase, inflation would again elevate in the short run,” said Anis Chakravarty, director with Deloitte, Haskins & Sells.

“Further, with higher than expected IIP (index of industrial production) numbers and a good monsoon predicted, inflation may rise during second quarter of this year. A series of further monetary policy tightening therefore cannot be ruled out,” he added.

Manufactured products index, the largest constituent of the wholesale price index — the barometer that indicates price behaviour — crept up 1.04 percent, while the primary articles index rose 2.2 percent.

The primary articles index is composed of both food and non-food items.

As a group, the food items index rose by 2.5 percent as compared to the like month of last fiscal, while non-food articles index moved up by 2 percent.

Finance Minister Pranab Mukherjee said the drop in inflation was welcome news and he hoped the downtrend would continue.

“The April prices have come down both on the manufacturing sector and food sector. This is good trend and if it continues, then perhaps it will be more moderated,” Mukherjee told reporters here.

Following is the 12-month inflation for some sub-indices within the overall wholesale price index:

–Primary articles: 12.05 percent

–Food Articles: 8.71 percent

–Vegetables: 2.29 percent

–Cereals: 4.3 percent

–Pulses: (-)6.37 percent

–Non-food articles: 27.33 percent

–Fuels and power: 13.32 percent

–Cooking gas: 11.31 percent

–Petrol: 21.81 percent

–Diesel: 5.49 percent

–Manufactured products: 6.18 percent

–Sugar: 3.33 percent

–Edible oils: 12.95 percent

–Manmade Textiles: 11.65 percent

–Cotton Textiles: 24.67 percent

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