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India's March Inflation Rate Drops Marginally

India's March Inflation Rate Drops Marginally
4/16/2012 4:01 AM ET

India's headline annual inflation rate for all commodities, based on the new series of WPI (Wholesale Price Index), for the month of March fell marginally to 6.89 percent from the preceding month's 6.95 percent due to cheaper prices of onion, fruits and wheat and some other manufactured products.

The rate of inflation was also lower than the 9.68 percent reported in the corresponding month last year, data say.

As per the official data released on Monday, inflation in food items stood at 9.94 percent in March, compared to 6.07 per cent in February.

Vegetables turned expensive by 30.57 percent and pulses by 10.05 percent, while egg/meat/fish and milk were up by 17.71 percent and 15.29 percent respectively. However, the rates of onion and fruits declined by 24.23 percent and 4.50 percent respectively.

Build-up inflation during the current fiscal so far fell to 6.89 percent from 9.68 in the corresponding period last year, the data showed.

Going by provisional figures, the WPI for 'all commodities' for March rose by 0.9 percent to 159.8 from its previous month's level of 158.4.

Final annual rate of inflation for January (based on the 2004-05 base year) revised upward to 6.89 percent from the earlier provisional figure of 6.55 percent.

Primary Articles

Index for the 'Primary Articles' group increased by 2.38 percent from the preceding month of February.

The groups and items for which the index showed variations during the month were:

Index for 'Food Articles' group increased by 2.34 percent from the previous month, due to higher prices of fruits and vegetables, chicken, barley, maize, bajra, gram, wheat, ragi and rice. However, prices of Jowar, tea, egg, urad, arhar and fish-marine declined.

Index under the 'Non-Food Articles' category rose by 1.29 percent from March, on higher prices of gaurseed, soyabean, groundnutseed, raw rubber, sunflower, copra, gingellyseed, fodder, safflower and raw jute, while those of flowers, castorseed, raw cotton and coir fibre dropped.

Index under the 'Minerals' category grew by 4.07 percent because of the higher prices of copper ore, magnesite, steatite, iron ore, zinc concentrate and crude petroleum, whereas those of sillimanite, manganese ore and barytes declined.

Fuel, Power

Index for fuel, power, light and lubricants grew by 0.46 percent from the previous month due to higher prices of light diesel oil, aviation turbine fuel, naphtha and furnace oil. However, the prices of bitumen fell.

Manufactured Products such as groundnut oil, palm oil, cotton seed oil, sugar confectionery, bidi, soft drinks, cotton yarn, hessian cloth, plywood, paper pulp, paper for printing/poster, leather footwear, rubber transmission belt, di ammonium phosphate, slag cement, ferro chrome, silver, pig iron, thresher, boiler and accessories, all types of shafts, bi-cycles and motor vehicles and some other items pushed up the index for 'Manufactured Products' to 0.35 percent.

However, prices of tea leaf (unblended), canned fish, ghee, copra oil, dried tobacco, timber/wooden planks, antacid and digestive preparations, washing powder, explosives, crc, metal containers, gold, gold ornaments, earth moving machinery, control equipment, computer power supply systems (smps), battery dry cells and insulator declined.

Inflationary pressures were cooling off in recent months, helped by the Reserve Bank of India or RBI's tight monetary policy and softening prices of some commodities. However, the risks of increase in inflation loom large because of steadily raising of crude oil prices.

RBI Governor Duvvuri Subba Rao will be releasing the fiscal monetary policy on Tuesday. Though it is expected that the apex bank will keep the key rates unchanged, industry circles clamour for rate cuts.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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