Inflation, as measured by the Wholesale Price Index, stood at 9.73 per cent in October, 2011. It was recorded at 8.2 per cent in November, 2010.
A marginal decline in inflation is good news amid the depressing scenario on the industrial production and rupee front.
While industrial production declined by 5.1 per cent in October, the rupee has fallen to an all—time low below Rs 53 per dollar.
With inflation dropping, all eyes are now on the RBI’s monetary policy review scheduled for December 16. The central bank has been hiking interest rates since March, 2010, in its bid to tame inflation, but in the last review, the RBI had indicated it may not hike the rates in December.
As per the data released today, inflation in food articles dipped to 8.54 per cent in the month under review from 10.14 per cent in the same month last year. The rate of price rise in food items stood at 14.64 per cent in October, 2011.
On an annual basis, the rate of price rise in the primary articles segment also dropped to 8.53 per cent in November from 14.67 per cent in the same month last year. Inflation in the segment stood at 18.09 per cent in October, 2011.
The data also revealed that inflation in the manufactured products segment was 7.7 per cent in the month under review.
In comparison, it was recorded at 5.02 per cent in November, 2010, and 7.6 per cent in October, 2011.
The data further revealed that rate of price rise in vegetables during the month under review stood at 12 per cent, in comparison to a 1.36 per cent contraction in November, 2010. Inflation in vegetables was as high as 21.76 per cent in October, 2011.However, onion prices contracted by over 34 per cent in November, in contrast to an increase of 36.82 per cent in the same month last year. Similarly, there was drop in the rate of price rise in potatoes and milk on a yearly basis.