Inflation slips for third straight week to 12.1%

Inflation, the major cause of headache for government and public is finally in its downward trend as it continues to slide for a third consecutive week. As per latest Wholesale Price Index (WPI) data, it has slipped to 12.1% for the week ended August 30.

Last week, as per the data till August 23, it was recorded at 12.34% while it was at 12.63% for the week ended for August 16. However, it is way ahead of the annual point-to-point inflation index for the same week of last year that was at 3.72%.

According to latest index report of inflation, the WPI index for all commodities has fell down marginally (0.24%) due to price declination into ‘primary article’ group and ‘manufactured products’.

Responding to this week-on-week progress, Finance Minister P. Chidambaram’s said: “Out of a total of 98 articles, 19 articles have shown a decline in prices in the current week as compared to August 16, 2008. These include rice, maize, moong, masur, and gram, onions and potatoes, dry chillies, cardamom, pineapple, papaya and cabbage.” “While another 61 articles have shown no increase in prices,” he added.

In the ‘manufactured product’ group, the index for this group declines for current week from 11.28% to 11.07% on the back of edible oils (mustard oil, imported oils and gingelly oil), zinc ingots, caustic soda, BOPP films and synthetic yarn.

“Out of 318 commodities, a large number, 296 in all, have shown no increase in prices over the last week….Only 14 products, particularly sugar, khandsari and gur, cement, hessian bags, groundnut oil, zinc and lead ingots, deoiled and groundnut cake, salt, cotton grey cloth, tyre cord fabric, mixed fabrics and acids witnessed an increase in prices,” stated Chidambaram in the statement.

The index of 30 essential commodities surge to 7.52% for the week ended for August 30 as against 6.90% for the week ended for August 23, 2008 due to price rise in sugar, salt, wheat, arhar, urad, jowar and bajra.

Despite of this recession trend, the Reserve Bank of India (RBI) is likely to continue its tightening monetary policy until inflation comes to the central bank’s comfort level under 5% that RBI eyes to bring down by the end of March next year.