India’s inflation rate dips to 5.07 percent(Lead)

February 5th, 2009 - 5:23 pm ICT by IANS  

New Delhi, Feb 5 (IANS) India’s annual rate of inflation dropped to 5.07 percent for the week ended Jan 24 from 5.64 percent the week before, fresh official data released here Thursday showed.The inflation rate was 4.78 percent during the corresponding week the previous year.

Going by provisional figures, the wholesale price index (WPI) for all commodities declined 0.2 percent to 230.1 from 230.5 the week before.

The index for primary articles also declined 0.1 percent to 249 (provisional) from 249.1 the previous week, while that for manufactured products declined 0.5 percent (provisional) to 200.8 from 201.8.

The index for fuel, power, light and lubricants rose 0.6 percent to 332 (provisional) from 330 last week due to higher prices of furnace oil and diesel.

Attributing the drop in the rate of rising prices to cyclical factors, K. Ponnukannu, a senior advisor in the commerce ministry, said the inflation rate would drop further on account of the reduction in the prices of petroleum fuels last month.

The government had permitted state-run oil retail firms to cut prices of petrol by Rs.5 a litre, and diesel by Rs.2 per litre and cooking gas by Rs.25 per cylinder.

D.K. Joshi, principal economist at credit rating agency Crisil said the fall in inflation was not surprising.

“There was a marginal rise in inflation due to trucker’s strike early last month. That aberration has been corrected now,” he said, adding that the inflation rate would continue to dip.

Dalip Kumar of think tank National Council of Applied Economic Research (NCAER) said the market was “flooded” with vegetables and fruits because of which food inflation was bound to drop.

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