Inflation drops further to 6.38 percent (Lead)January 1st, 2009 - 7:01 pm ICT by IANS
New Delhi, Jan 1 (IANS) India’s annual rate of inflation dipped further to 6.38 percent for the week ended Dec 20 from 6.61 percent the week before, official data released Thursday said.The inflation rate was 3.74 percent during the corresponding week the previous year.
The wholesale price index (WPI) for all commodities declined 0.2 percent to 230.2 from 230.7 the previous week. All the figures in the index are provisional.
The index for primary articles declined 0.2 percent to 248.8 from 249.2 the previous week.
The index for fuel, power, light and lubricants declined 0.5 percent to 330.5 from 332.1 the previous week due to lowering of aviation fuel prices by 13 percent, and light diesel oil by 6 percent.
The index for manufactured products, too, declined 0.1 percent to 201.4 from 201.7 in the previous week.
Economists said the fall in fuel prices and the tight monetary policy adopted by the central bank in recent months would push inflation further downwards.
Dalip Kumar, the head of projects at the National Council of Applied Economics Research (NCAER), an economic research institution, says prices will continue to decline steadily.
He said the rate of inflation would moderate to below 5 percent by next month and close to 2 percent by March 2009.
However, despite the rate of inflation moderating, India needs policies that can prevent growth from slipping further, Kumar said.
According to Shriram Khanna, head of the commerce department at the Delhi School of Economics, India’s economy will be driven now by how developed countries stabilise their financial sectors and the markets.