India-Inflation-Eases
The inflation in India snapped its nine-week long upsurge to decline marginally by 0.02 as prices of food items like potato, maize, sea fish, tea and imported edible oils fell.
The fall in inflation, data for which was released Thursday evening, for the week ending 12th July comes within 48 hours of the UPA government winning a crucial trust vote in Parliament, where the Opposition criticized it for the rising prices.
The inflation rate, which stood at 7.82 per cent for the week ended 10th May, shot up to 11.05 per cent in June after an increase in prices of petroleum products.
It further rose to 11.91 per cent for the week ended on 5th July.
Inflation was 4.76 per cent during the corresponding week a year-ago.
According to official figures, the moderation was due to fall in prices of food items like potato, maize, sea fish, tea and imported edible oils, though other commodities like coffee, fruits and vegetables, mutton and certain pulses like urad, moong and arhar became expensive during the week.
Meanwhile, analysts said the high inflation rate, which is ruling at a 13-year high level, may force the Reserve Bank to further hike short-term lending rates (repo) as well as statutory deposit requirements (CRR) when it reviews the credit policy on 29th July.
RBI on 24th June already increased repo rate and cash reserve ration (CRR) by 0.5 per cent each to counter inflation.
Possibly due to impact of floods in certain parts of the country, prices of vegetables went up by 4.8 per cent during the week, while pulses became dearer by 0.9 per cent and cotton by one per cent.
The manufactured products, which have a weight of 63.75 per cent in the wholesale price index, rose by 0.05 per cent, while prices of fuel, power, light and lubricants with a weight of 14.23 per cent in the index, remained stable.
The Finance Ministry statement said the annual inflation for 30 essential commodities stood at 5.82 per cent for the week.
In the group of basic metals, alloys and metal products, the price of lead ingots increased by 6 per cent followed by 3 per cent rise in prices of zinc ingots.
The prices of electrical equipment and systems also rose by 2 per cent followed by one per cent rise in prices of enamelled copper wires.
