Inflation rate up marginally, touches 10.72 percent (Lead)

November 6th, 2008 - 7:01 pm ICT by IANS  

New Delhi, Nov 6 (IANS) India’s annual rate of inflation, which had been easing for five consecutive weeks, rose slightly to 10.72 percent for the week ended Oct 25, from 10.68 percent the week before, government data released Thursday showed.The wholesale price index (WPI) for all commodities released by the ministry of commerce and industry showed an increase of 0.1 percent, with the index for primary articles having gone up 0.4 percent. The index for food articles rose 0.4 percent due to the higher prices of rice (3 percent), and urad and tea (2 percent each).

In a statement, the finance ministry noted that the annual rate of inflation was 12.91 percent for the week ended Aug 2, but went to add: “The inflation in the same period in the previous year at 3.11 percent, however, was significantly lower.”

The annual point-to-point inflation in the primary articles group increased to 11.41 percent, as compared to 10.92 percent reported last week, said the finance ministry statement.

Out of 318 commodities, 298 have shown no increase in prices over the last week. In the case of 12 commodities, there has been a decline in prices.

The index for fuel, power, light and lubricants remain unchanged at the previous week’s level of 369, while that for manufactured products declined marginally by 0.1 percent to 205.3 from 205.4 for the previous week. Both figures are provisional.

The annual rate of inflation based on the final index, calculated on point-to-point basis, stood at 12.38 percent for the week ended Aug 30, as compared to the provisional 12.1 percent.

Double-digit inflation is a cause for concern for the government, which is faced with a sluggish economy, a volatile domestic financial market, and the forthcoming assembly elections in six states including Delhi later this month.

But economists said such fluctuations in the inflation rate are normal, and that it would moderate to touch single digit very soon.

“Despite the marginal increase in inflation, prices are not going up. Inflation will take some time to stabilise. Food prices would further stabilise once food grains start reaching the market,” said Shri Ram Khanna, head of the commerce department at the Delhi School of Economics.

The Prime Minister’s Economic Advisory Council (EAC) has forecast an economic growth of 7.7 percent in the current fiscal, against an average expansion of 9 percent in the past four years.

Former Reserve Bank of India (RBI) Governor C. Rangarajan, who also chaired the EAC till recently, has forecast the inflation rate to moderate to 10 percent by December.

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