The Hindu : Business : Inflation dips below 4 per cent

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Saturday, Sep 01, 2007
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Inflation dips below 4 per cent

Special Correspondent

Recent monetary and fiscal measures are yielding dividends

NEW DELHI: For the first time in over 15 months, the rate of inflation slumped below four per cent to touch 3.94 per cent for the week ended August 18 as compared to 4.10 per cent a week earlier.

At this level, the rate of inflation based on the wholesale price index (WPI) has slid much below the five per cent mark, as projected by the Reserve Bank of India (RBI) for the current fiscal and even lower than its targeted 4.0-4.5 per cent for the medium term.

The latest data on inflation bears proof that the monetary and fiscal measures clamped in recent months by the RBI and the Government have finally started yielding dividends.

During the same week last year, inflation was pegged at 5.12 per cent.

Curiously, although prices of essential food articles such as vegetables, fruits, milk, eggs, meat and fish increased during the week, the fall in inflation rate was owing to the lower prices of most manufactured products and non-food primary articles.

Food articles’ prices up

Among food articles, prices of pulses such as masur rose by two per cent, bajra and gram by one per cent, vegetables by 1.3 per cent, fruits 0.6 per cent and milk by one per cent. In the manufactured category, however, prices of food products also declined. Rice bran oil and imported edible oil slid by two per cent each, while cotton seed oil, khandsari and oil cakes turned cheaper by one per cent each. Meanwhile, inflation for the week ended June 23 stands revised to 4.32 per cent as compared with the provisional estimate of 4.13 per cent.

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