Inflation slips to 3.51 pc on account of cheaper tea, cereals

New Delhi, Apr 16 (UNI) The annual rate of inflation fell to 3.51 per cent for the week ended April 1 as against 3.96 per cent for the previous week, due to lower prices of cereals, tea and edible oil.

The inflation rate stood at 5.70 per cent in the corresponding week of the previous year.

The inflation rate is in line with market expectations after Finance Minister P Chidambaram earlier indicated that inflation would be around 3.96 per cent.

The Wholesale Price Index (WPI) for all commodities increased by 0.4 per cent to 197.7 from 197.0 for the previous week.

India's inflation is running below the Reserve Bank of India's projection for 5-5.5 per cent at the end of the fiscal year on March 31.

The Reverse Repo rate, or the rate at which the central bank absorbs money from the market, is currently at 5.5 per cent and the Repo Rate, at which the central bank pumps money into the banking system, is at 6.5 per cent.

The index for primary articles climbed up by 1.3 per cent to 195.7 from 193.1 for the previous week.

The index for the Food Articles group went up by 1.9 per cent to 199.0 from 195.3 for the previous week due to higher prices of urad (16 per cent), moong (10 per cent), fruits and vegetables (8 per cent), eggs (4 per cent), arhar and condiments and spices (3 per cent each), gram (2 per cent) and bajra and jowar (1 per cent each).

However, the prices of maize and wheat (2 per cent each) and barley and masur ( 1 per cent each) declined.

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