The Hindu : Front Page : Inflation dips to 7.14 per cent

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Friday, Apr 18, 2008
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Inflation dips to 7.14 per cent

Sujay Mehdudia

NEW DELHI: The Central government, under criticism from its United Progressive Alliance (UPA) allies as well as the Opposition parties on the issue of rising prices of essential commodities, got some relief with the inflation rate slipping to 7.14 per cent during the first week of the new financial year.

The “direct fiscal steps” announced by the government in the shape of the reduction or cut in customs duties and ban on exports of certain items to tackle the surging prices showed signs of paying off with the official data on Thursday, indicating that inflation slipped by 0.27 per cent during the week ended April 5, down from a 40-month high level of 7.41 per cent a week ago.

The wholesale price-based inflation declined on account of easing of prices of fruits, gur and certain edible oils. The prices of vegetables, tea, pulses and coconut oil, however, continued to rise during the period. In the non-food category, the prices of steel alloys and aviation turbine fuel too remained firm.

Officials said the easing of inflation could be attributed to the government’s decision to ban exports of non-basmati rice and extend the ban on export of pulses for another year, besides slashing customs duty on some essential food items with effect from April 1.

Even though the rate of price increase has fallen in most cases some essential food items became expensive. Vegetables turned costlier by a whopping 10 per cent.

Tea prices rose by four per cent, moong and oil cakes by two per cent each and coconut oil, urad, milk, masur, gram and pork by one per cent each.

However, rice bran oil and coconut seed oil turned cheaper by six per cent each, fruits by 4.1 per cent, condiments and spices by 3.2 per cent, gur by three per cent and various categories of other edible oils by two to one per cent.

Similarly, prices of most manufactured items like metals, alloys, chemicals and machinery also rose. Steel alloys were costlier by 12.2 per cent. Aviation turbine fuel became expensive by 15 per cent.

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