2010.08.1904:22:00UTC+00India's Food Inflation Rate Drops Marginally

Lower prices of potatoes, vegetables and onions brought down the inflation of India's rate of annual food prices, as measured by the wholesale price index, or WPI, for the week ended August 7 to 10.35 per cent from the 11.40 per cent of the preceding week.

The rate of inflation for the corresponding week in the preceding year was 14.18 per cent. The 52-week average inflation for the week ended August 7 was 15.94 per cent, as per the data released by the Ministry of Commerce and Industry.

The rate of inflation during the year under the "Non-Food Articles" category fell marginally to 21.70 per cent from the 21.79 per cent of the preceding week. The 52-week average inflation for the week ended August 7 was 11.83 per cent.

Primary articles

The annual rate of inflation for the week ended August 7 was 14.85 per cent, lower to the 15.66 per cent for the preceding week. It was 7.85 per cent for the corresponding week of the preceding year. The 52-week average inflation for the week under review was 14.61 per cent, show the data.

The index for this group, with a weightage of 22.02 per cent, fell by 0.06 per cent over the preceding week.

Here are the groups and items for which the WPI showed variations:

The index for the "Food Articles" category rose by 0.17 per cent from the preceding week, due to the higher prices of maize, tea, rice, fish-marine, condiments and spices. However, the prices of moong, masur, urad and bajra declined.

The index for the "Non-Food Articles" group dropped by 0.62 per cent, due to the lower prices of soyabean, raw silk, fodder and gingellyseed, while those of groundnutseed, copra and raw rubber moved up.

Fuel, Power, Light & Lubricants

The annual rate of inflation under this category was 12.57 per cent, down from 12.66 per cent of the preceding week. It was minus 9.88 per cent for the corresponding week of the preceding year. The 52-week average inflation for the week under review was 5.88 per cent.

The index for this major group, carrying a weightage of 14.23 per cent, dropped by 0.08 per cent, as the price of naphtha fell. However, there was a rise in the prices of aviation turbine fuel and furnace oil.

Analysts feel that the Reserve Bank of India or RBI might further tighten its monetary policy stance to rein in inflation, when it meets next month for its mid-quarter review.

Containing inflationary pressure is the foremost policy of RBI. The apex bank in three months raised the repo and reverse repo rates by 50 basis points and 75 basis points respectively. Presently, the repo rate is at 5.75 per cent while reverse repo stands at 4.50 per cent.

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