Inflation hits 26-month high

Inflation hits 26-month high

NEW DELHI, JAN 7: The inflation rate breached its two-year record on December 23, 2000 touching 8.02 per cent, the highest level since November 14, 1998 with the decline in food and non-food articles failing to act as a dampener.

However, in a sharp contrast to the trend of inflation based on WPI, the inflation rate based on the consumer price index continued to decline for the fifth consecutive month since July, 2000 reflecting that the prices at the retail level moved slowly. The inflation rate based on consumer price index for industrial workers slid minutely by 0.1 per cent to 2.74 per cent in November from 2.75 per cent in the previous month.

A significant fall in prices of fruits and vegetable, coffee, soyabean, kardi seed and jowar could not rein in the inflation, based on the wholesale price index (WPI) which is coming close to the level of 8.21 per cent, recorded last on November 14, 1998. Fall in prices of these articles was some what neutralised by a rise in the cost of marine fish, mesta, raw rubber, hessian, sacking bags, glass and steel sheets, plates, strips and textile machinery.

While the inflation was 8.01 per cent in the week previous to December 23, 2000, it was way ahead of 3.26 per cent recorded in the corresponding week of the last year. WPI for all commodities (base 1993-94) was at a level of 157.6 for the week ended December 23,2000 against 145.9 in the corresponding week last year.

The final wholesale price index for all commodities is available only till October 28, 2000 when it stood at 158.2 as against the provisional index of 157.7. The inflation rate based on final index for this week worked out to 7.25 per cent as against 6.92 per cent based on the provisional index.

With jowar becoming cheaper by five per cent, fruits, vegetables and coffee by three per cent each, barley, moong, buffalo meat, poultry chicken by two per cent each, gram, fish (inland), pork, condiments and spices by one per cent each, the index for food articles, under the primary articles group, dropped by 0.7 per cent to 168.3 from 169.5. But fish (marine) became costlier by 5 per cent.

The index for non-food articles also fell by 0.7 per cent to 146.4 from 147.5 because soyabean prices dropped by 11 per cent, kardi seed by five per cent, raw silk, gingelly seed and castor seed by two per cent each, raw cotton, cotton seed and raw skins by one per cent each. But mesta prices shot up sharply by 8 per cent, raw rubber by 5 per cent, rapeseed, mustard seed, copra and fodder by 2 per cent each and raw jute by one per cent.

As groundnut oil prices declined by four per cent, ghee by two per cent, atta, bran (all kinds), rapeseed oil and mustard seed oil by one per cent each, the index for food products, under the manufactured products group, dipped by 0.1 per cent to 144.8 from 144.9. But the prices of khandsari and gingelly oil became costlier by two per cent each, butter, gur and malted food by one per cent each.

The index for textiles went up sharply by 1.3 per cent to 122.2 from 120.6 because hessian and sacking bags prices rose by seven per cent, cotton yarn by three per cent, polyester staple fibre by two per cent, viscose filament yarn and hessian cloth by one per cent each. But the prices of texturised yarn became cheaper by four per cent, nylon filament yarn and polyester yarn by one per cent each. Due to two per cent hike in prices of plywood commercial planks, the index for wood and wood products rose by 0.9 per cent to 170.3 from 168.7.

The index for chemicals and chemical products climbed up by 0.1per cent to 166.5 from 166.4 because acids (all kinds) by three per cent, varnishes by two per cent and enamels by one per cent. But liquid chlorine prices declined by one per cent.

A sharp five per cent hike in glass sheets prices pushed up theindex for non-metallic mineral products by 0.1 per cent to 134.1 from 133.9.

The index for basic metals alloys and metals products declined by0.1 per cent to 141 from 141.1 because steel sheets plates and strips became cheaper by seven per cent, joist and rolls by two per cent. But the prices of other iron steel moved up by two per cent and Ms Bars and rounds by one per cent.

The index for machinery and machine rose by 0.1 per cent to 125.3from 125.2 because other textile machinery increased by four per cent and electric motors by three per cent.

The index for fuel, power, light and lubricants remained at itsprevious week's level of 217.9. Other indices that remained static at their previous week's level were minerals, beverages, tobacco and tobacco products, paper and paper products, leather and leather products, rubber and plastic products and transport equipment and parts.