New Delhi, Sep 11 (UNI) Solving the riddle of inflation does not appear to be distant dream any longer as inflation data today showed the Wholesale Price Index (WPI) moving Southwards for the third consecutive week to 12.10 per cent for the week ended August 30 as against 12.34 per cent in the previous week.
While the index for the two major groups -- Primary Articles and Manufactured Products -- rose by 0.3 per cent each, for the third major group --'Fuel, Power, Light and Lubricants'-- it remained unchanged at its previous weeks level.
A Finance Ministry statement on the inflation figures while not commenting on the decline in the WPI took note of some changes in the commodities listed under various groups.
For instance, it said out of a total 98 articles in the 'Primary Article' group, 19 articles have shown a decline in prices in the current week as compared to August 16, 2008. These included rice, maize, moong, masur, and gram, onions and potatoes, dry chillies, cardamom, pineapple, papaya and cabbage.
However, another 61 articles have shown no increase in prices.
In the case of 'Manufactured Products', out of 318 commodities, 296 have shown no increase in prices over the last week, the statement said.
Experts wondered whether India's inflation rate has peaked, which may give a pause to the Central Bank's tight monetary policy stance.
The RBI is slated to the review its monetary policy on October 24, even though its new Governor D Subbarao recently stated that he would take ''appropriate action'' if the trend in moderation of inflation becomes more clearly discernible.
There is, however, no denying the fact the present level of inflation is way above the comfort zone, possibly a result of the policy of hardening of interest rates and the fiscal and administrative measures taken by the Union Government.
There is now a widespread agreement among economists as also government functionaries that the tight money policy has come hard on growth rate and the targeted GDP growth rate of eight per cent increase this fiscal would not be achieved.
The broad consensus is that the Indian economy will clock a growth rate of 7.7 per cent plus in FY09, by no means a disappointing figure.
Decling oil and commodity prices are helping cool inflation not only in India but across Asia.
Both China and Japan have also recorded a decline in the price level, but only after making some sacrifices of growth.
What the final picture will emerge will depend on host of factors, such as the OPECs decision to increasing the output of oil, the global action on speculators and speculative activity in the petroleum market, the stance of Central Bankers all over the world and the degree of imported inflation, which is peculiar to different countries but is related to the degree of openness of their economies.
UNI MP/GS SBA CS2130