Financial Daily from THE HINDU group of publications
Saturday, Jun 18, 2005
Industry & Economy - Economy
Inflation falls on cheaper fruits, vegetables
New Delhi , June 17
THE annual wholesale price index (WPI)-based inflation was 4.22 per cent during the week ended June 4, lower than the previous week's 5.2 per cent.
The fall in the year-on-year inflation growth rate to a 13-month low was mainly on account of lower prices of fruit and vegetables and manufactured products, according to data released by the Ministry of Commerce and Industry today.
Inflation was as high as 6.7 per cent during the corresponding period last year, thus contributing to a decline in the current inflation rates due to the high base effect of last year.
The WPI rose by 0.2 per cent to 192.5 points due to an increase in the index of fuel products, while there was fall in the indices of primary articles and manufactured products.
The index stood at 184.7 points during the corresponding previous period.
On a disaggregated basis, the Primary Articles group index declined by 0.2 per cent to 188.7 points due to cheaper food articles, even as non-food articles became costlier.
A five per cent spurt in electricity prices pushed up the Fuel, Power, Light and Lubricants group index by over one per cent to 296.3 points.
The heavy-weighted Manufactured Products group index was down 0.1 per cent to 170.6 points, even as food products, rubber, and transport equipment became costlier.
Among the Primary Articles group, the Food Articles group index fell by 0.5 per cent to 190.1 points due to lower prices of fruits and vegetables (three per cent each) and bajra (one per cent).
But prices moved up for condiments and spices (two per cent) and gram, barley, urad, and moong (one per cent each).
The Non-Food Articles group index was up 0.4 per cent to 180.3 points owing to higher prices of logs and timber and soyabean (five per cent each), castor seed (two per cent) and copra (one per cent).
However, prices fell for safflower (eight per cent), raw silk and raw rubber (two per cent each), and sunflower (one per cent). Among the Manufactured Products group, the Food Products group index rose by 0.1 per cent to 173.9 points due to higher prices of skimmed milk powder (four per cent), unrefined oil (two per cent) and oil cakes and gur (one per cent each).
However, there was a one per cent decline each in the prices of coconut oil, rice bran oil, hydrogenated vanaspati, and ghee.
A one per cent rise in the prices of scented chewing tobacco pushed up marginally the index for Beverages Tobacco and Tobacco Products group to 222.3 points.
The Textiles group index was down by 0.3 per cent to 131.1 points due to lower prices of polyester staple fibre (six per cent) and nylon filament yarn (two per cent).
But prices rose for tyre cord fabric (11 per cent), hessian and sacking bags (three per cent), and hessian cloth (one per cent).
The Paper and Paper Products group index declined by 0.1 per cent to 177.5 points due to a fall in the prices of pulp (three per cent) and newsprint (one per cent), but printing paper white became costlier by one per cent.
A five per cent rise in the prices of plastic containers led to a 0.1 per cent increase in the index of Rubber and Plastic Products to 136.7 points.
The Chemicals and Chemical Products group index was down by 0.1 per cent to 186.5 points due to cheaper purified teraphthalic acid (11 per cent) and acid (one per cent), even as caustic soda became costlier by one per cent.
A fall in cement prices pushed down the Non-Metallic Mineral Products group index by 0.2 per cent to 168.4 points.
A two per cent decline in colour TV sets prices led to 0.1 per cent fall in the index of Machinery and Machine Tools group to 145.6 points.
According to the data, the Government revised upwards inflation to 5.86 per cent during the week ended April 9, compared to the provisional estimate of 5.48 per cent.
The WPI stood corrected at 191.4 points in the second week of April as against provisional level of 190.7 points.
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