The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 29th August 2009 rose by 0.2% to 241.1 from 240.7 for the previous week. The annual rate of inflation stood at -0.12% during the week ended 29 August 2009. 52 week average inflation for the week ended 29 August 2009 3.99%.
The index of primary articles rose by 0.3% to 271.2 which include 0.4% growth from food articles and 0.2% gain from non food articles. Among primary articles, prices of food articles recorded 0.4% growth due to higher prices of eggs (4%), fish-marine (2%) and moong, fruits & vegetables and milk (1% each). However, the prices of jowar, masur and gram (1% each) declined. On other hand, prices of non food articles recorded 0.2% growth due to higher prices of fodder (13%), castor seed (3%), raw rubber (2%) and rape & mustard seed (1%). However, the prices of linseed (6%), sunflower (4%), niger seed (3%) and gingelly seed (1%) declined.
On other hand index for fuel and power remained unchanged during the week ended 29 August 2009.
The major index in India's WPI, that is manufactured product rose by 0.2% during the week ended 29 August 2009. The index of food product recorded 0.2% fall due to lower prices of salt (4%) and sugar and cotton seed oil (1% each). However, the prices of soyabean oil (3%) and rice bran oil, ghee, groundnut oil and imported edible oil (1% each) moved up. One of the major index in WPI , that is chemical and products rose by 1.3% due to higher prices of household laundry soap (35%), synthetic detergent (17%), toilet soap and tooth paste (6% each) and carbon black (1%). However, the prices of synthetic resins (27%) declined. The index for 'Basic Metals Alloys & Metal Products' group declined by 0.1 during the week ended.
Inflation during the week ended 4 July 2009 has been revised to -0.75% now which was -1.21% reported earlier.
On week on week basis, the growth in India's headline inflation is due to the rise in prices of food articles. Moving forward inflation number has set for positive growth from here onwards on back of rising food prices and lower base effect setting in. Meanwhile, the index of consumer prices is in double digit. Underline inflationary pressure from WPI and double digit growth in CPI has created worrisome for policy makers. Though the apex bank of the country has projected 5% growth for WPI in FY 09-10, the week on week growth in inflation is indicating that inflation is likely to move above the projection. More then anticipated growth in money supply and growing demand are two main factors which will push inflation in positive zone in coming weeks.
The RBI is holding the monetary instruments like hike in CRR and repo rate which will curtail excess money supply and excess demand.
