Inflation climbs to 7.83 per cent

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New Delhi, May 16: The headline inflation rate for the week ended May 3 surged to 7.83 per cent as compared to 7.61 per cent for the previous week due to higher prices of food articles, fuel and minerals. The annual inflation rate was 5.74 per cent during the corresponding week of the previous year, a statement said. It was the highest since an annual reading of 7.93 per cent on November 6, 2004.

Finance Minister P Chidambaram on May 14 said controlling inflation is the biggest challenge before the country. The government is under pressure to contain prices ahead of state polls this year and national elections due by next year. Earlier Planning Commission Deputy Chairman Montek Singh Ahluwalia said, ''it is important to control inflation while keeping growth at eight per cent. High inflation will kill the medium-term growth process.'' The surging inflation has forced the government to take slew of measures such as abolishing import duties on edible oil and curbing rice exports along with suspension of futures trading in soybean oil, potatoes, rubber and gram.

However, the government has no plans to further cut the oil duties or to ban futures trading on other commodities but it is likely to further cut cement prices. ''I think that there is scope for significant reduction in cement prices,'' Mr Chidambaram told reporters after a cabinet meeting yesterday.

The cement companies have agreed to cut Rs three and Rs 7.50 per bag of 50 kg. The Wholesale Price Index (WPI) for 'All Commodities' for the week ended May 3 rose by 0.4 per cent to 228.6 (Provisional) from 227.7 (Provisional) for the previous week.

The index for 'Primary Food Articles' rose by 0.3 per cent to 239.3 (Provisional) from 238.6 (Provisional) for the previous week.

The index for the 'Food Articles' group rose by 0.5 per cent to 231.5 (Provisional) from 230.4 for the previous week due to higher prices of coffee (6 per cent), maize (4 per cent), fruits and vegetables (3 per cent) and condiments and spices, masoor and jowar (1 per cent each).

However, the prices of moong (3 per cent), barley (2 per cent) and wheat (1 per cent) declined. The index for 'Non-Food Articles' group declined by 0.1 per cent to 227.9 (Provisional) from 228.2 (Provisional) for the previous week due to lower prices of logs and timber (9 per cent) and linseed, raw tobacco and fodder (1 per cent each).

However, the prices of copra (3 per cent) and gingelly seed and rape and mustard seed (2 per cent each ) moved up. The index for 'Fuel, Power, Light and Lubricants' group rose by 0.8 per cent to 345.4 (Provisional) from 342.5 (Provisional) for the previous week due to higher prices of lignite (16 per cent), naphtha (7 per cent), furnace oil (4 per cent) and bitumen and light diesel oil (2 per cent each).

The index for 'Manufactured Products' group rose by 0.3 per cent to 198.9 (Provisional) from 198.3 (Provisional) for the previous week. The index for 'Food Products' group rose by 0.7 per cent to 204.3 (Provisional) from 202.8 (Provisional) for the previous week due to higher prices of khandsari (eleven per cent), oil cakes (4 per cent), coconut oil (3 per cent) and atta (2 per cent).

However, the prices of gur (4 per cent), rice bran oil (3 per cent), rape and mustard oil and cotton seed oil (2 per cent each) and gingelly oil and sooji (rawa) one per cent each declined.

The index for 'Beverages Tobacco and Tobacco Products' group rose by 3.0 per cent to 285.0 (Provisional) from 276.7 (Provisional) for the previous week due to higher prices of cigarettes (8 per cent).

However, the price of scented chewing tobacco (one per cent) declined.

The index for 'Textiles' group rose by 1.1 per cent to 128.0 (Provisional) from 126.6 (Provisional) for the previous week due to higher prices of synthetic yarn (16 per cent) and cotton yarn cones (1 per cent).

The index for 'Wood and Wood Products' group rose by 1.0 per cent to 218.0 (Provisional) from 215.9 (Provisional) for the previous week due to higher prices of plywood commercial planks (2 per cent).

The index for 'Chemicals and Chemicals Products' group rose by 0.9 per cent to 212.2 (Provisional) from 210.3 (Provisional) for the previous week due to higher prices of ammonium sulphate n_content (27 per cent), pigments (five per cent) and organic pigments (four per cent).

The index for 'Non Metallic Mineral Products' group declined by 0.3 per cent to 214.4 (Provisional) from 215.0 (Provisional) for the previous week due to lower prices of cement (0.4 per cent).

The index for 'Basic Metals, Alloys and Metal Products' group declined by 1.0 per cent to 294.2 (Provisional) from 297.1 (Provisional) for the previous week due to lower prices of basic pig iron and foundary pig iron (ten per cent each), ms bars and rounds (nine per cent), other iron steel (eight per cent), steel sheets, plates and strips (six per cent), zinc (four per cent), lead ingots (two per cent) and zinc ingots (one per cent).

However, the prices of pipes and tubes (four per cent) moved up.

The index for 'Machinery and Machine Tools' group rose by 0.1 per cent to 171.1 (Provisional) from 170.9 (Provisional) for the previous week due to higher prices of agricultural implements (19 per cent), complete engines (two per cent), and enamelled copper wires (one per cent).

However, the prices of other electrical equipment and systems (six per cent) declined.

The index for 'Transport Equipment and Parts' group declined by 0.1 per cent to 171.2 (Provisional) from 171.4 (Provisional) for the previous week due to lower prices of bus chassis (diesel) (two per cent).

UNI

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