RTTNews - India's inflation rate is in the negative territory for the ninth consecutive week, with the figure for the week ended August 1 standing at 1.74%, compared to the previous week's 1.58%.
The annual rate of inflation was 12.91% for the corresponding week of the preceding year, say data released Thursday by the Ministry of Commerce and Industry.
Going by the provisional figures, the wholesale price index or WPI for all-commodities rose by 0.1% to 237.2 from 236.9 for the preceding week.
Inflation, based on the wholesale price index, decreased, though the prices of some food items like pulses, fruits and vegetables, edible oils, as also sugar, continued to move up. The prices may go up in a fast phase in the coming months, due to the weak monsoon and growing manufacturing demands.
The final estimate of inflation for the week ended June 6 was lowered to -1.01% from the earlier provisional figure of -1.61%.
The increase in the prices of barley, jowar, gram, condiments and spices, arhar, as also fruits and vegetables in the Food Articles category, besides raw silk, fodder and gingelly seed in the Non-Food Category kept the main index for Primary Articles to grow by 0.1% from the previous week's level. However, the price of tea declined.
The index representing fuel, power, light and lubricants rose marginally to 338.3 from the previous week's level of 338.2 .
The index for Manufactured Products rose by 0.1%, due to the higher prices of beer and alcohol, electrodes, benzene, zinc, imported edible oil, unrefined oil, lead ingots, air and gas compressors, khandsari, as also sugar, while those of ACSR conductors, cranes, basic pig iron, foundry pig iron, rice bran oil, as also cotton seed oil dropped.
Reserve Bank of India estimated that the inflation rate would be around 4% by March-end.
Crisil, the premier credit ratings organization, said this year's weak monsoon posed risks to India's growth and inflation rates, as any drop in agricultural production might result in higher burden on the exchequer to provide relief to affected states.
It added that the food inflation, already under pressure, may accelerate further due to lack of buffer stock for rain-dependent coarse cereals and pulses. However, sufficient stocks of rice would control rice prices, it said.
Another think-tank, Centre for Monitoring Indian Economy (CMIE ), expects the Wholesale Price Index (WPI) to raise after November and inflation may reach 3% by the end of this fiscal, and average inflation for the year would be modest at 0.5%. higher than the earlier projection of 0.1%.
Faced with the dichotomy of overflowing granaries and rising commodity prices, Prime Minister Manmohan Singh said his government would initiate all remedial measures to control food inflation. He was confident that given the buffer stock, the government would be able to handle the food inflation.
Rupa Rege Nitsure, Chief Economist of Bank of Baroda in Mumbai, said the drop in the wholesale price index was entirely the result of last year's high base level, and inflation pressures looming. She added that the monsoon situation so far had created pressure on primary article prices, and manufacturing prices also started rising due to industrial commodity prices like steel, non-ferrous metals.
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