India’s annual inflation rate dips further to 4.39 percent (Lead)February 12th, 2009 - 4:55 pm ICT by IANS
New Delhi, Feb 12 (IANS) India’s annual rate of inflation continued its descent, falling to 4.39 percent for the week ended Jan 31 from 5.07 percent the week before, official data showed Thursday.
The inflation rate, based on the official wholesale price index (WPI), stood at 4.74 percent for the corresponding week of the previous fiscal, according to the statistics released by the industry ministry here.
The fall during the week under review was due mainly to a 3.1 percent decline in the index for fuels, as the result of a 21 percent drop in prices of lignite, 11 percent in petrol, 8 percent in cooking gas and 7 percent in high speed diesel.
While the index for primary articles fell 0.2 percent, that for manufacturing also declined 0.1 percent.
Reacting to the further drop in inflation, Dalip Kumar of the National Council of Applied Economic Research (NCAER) linked it to to the reduction in the prices of petroleum fuels last month - petrol by Rs.5 a litre, diesel by Rs.2 per litre and cooking gas by Rs.25 per cylinder.
The government is also anxious about keeping inflation under check as the parliamentary election is round the corner, he said, and added that stringent measures have been adopted to discourage black marketing.
“This, too, has helped bring down the inflation rate,” Kumar said, but stressed that it should not fall below 2 percent as it would not be good for the economy.
“If the inflation rate drops drastically, it would effect production also. I think the inflation would stabilise a little over 3 percent by March-end.”
D.K. Joshi, principal economist at credit rating agency Crisil, too said the inflation rate would continue to dip and stabilise to three percent by fiscal-end.