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Inflation rate 7.41, touches 66-week high

Reeling under the budgetary impact, the inflation rate witnessed a steep climb for the eleventh successive week to touch a 66-week high of 7.41 per cent on June 28. It was 6.86 per cent the preceding week.

However, it was much below the six per cent mark at 5.65 per cent during the corresponding week last year.

The latest 0.55 per cent jump in the inflation rate was on account of a substantial hike in prices of bajra, jowar, mesta, fodder, raw cotton, rape seed oil, mustard seed oil, mahua oil, handloom cloth, hessian, sacking bags, drugs, medicines, typewriters and jeeps. But the prices of coir yarn and camel back declined during the week under review.

After staying above six per cent mark for eight consecutive weeks since May 2, the inflation rate bludgeoned the seven per cent mark on June 28.

The inflation rate has been going up on expected lines. Many financial pundits had predicted that the budgetary hikes would bolster the inflation rate to some extent. They had even forecast earlier that the inflation rate would cross the seven per cent barrier.

The Centre for Monitoring Indian Economy had also predicted that the inflation rate in coming months would touch the eight per cent mark.

The inflation rate recorded a rise of 2.5 per cent during the first quarter of the current financial year. It had been orbiting in the single digit for the 170 weeks in a row, surpassing the old record of 1993.

The inflation rate based on consumer price index (industrial Workers) touched the double digits at 10.51 per cent during May this year, after a gap of 14 months.

For the third consecutive week, the official wholesale price index for all commodities (base 1981-82) rose by 0.5 per cent to touch 347.7 on June 27 from 346 in the previous week. The main reason for the index to go up was the rise in the indices of food articles, non-food articles, food products, textiles, chemicals and chemical products, machinery and machine tools and transport equipment and parts.

The final wholesale price index for all commodities (base 1981-82) stood at 343.1 on May 2 as against the provisional index of 341.8. The inflation rate based on final index worked out to 6.45 per cent in contrast to 6.05 per cent based on provisional index.

With bajra prices going up sharply by eight per cent, jowar prices up by four per cent, eggs prices up by three per cent, maize, ragi, gram, arhar, masur, fruits and vegetables prices up by two per cent each, rice, moong, milk, mutton and tea prices up by one per cent each, the index for food articles under primary articles group, jumped up by 1.1 per cent to 431.4 from 426.6 the previous week. But barley prices fell by one per cent.

The index for non-food articles went up by 0.9 per cent to 367.4 from 364.3 because mesta became costlier by eight per cent, fodder prices up four per cent, raw cotton prices up by three per cent, raw jute, rape seed, mustard seed, copra, linseed and sunflower seed prices up by two per cent each, castor seed and lac prices up by one per cent each. But the prices of gingelly seed and tobacco prices declined by one per cent each.

As rape seed oil and mustard seed oil became dearer by six per cent, mahua oil prices up by five per cent, maida, suji, atta, gur coconut oil, and oil cakes up by one per cent each, the index for food products, under the manufactured products group, climbed up by 0.4 per cent to 338.8 from 337.4. But bran and groundnut oil became cheaper by one per cent each.

The textiles index rose by 0.8 per cent to 320.4 from 317.8 because handloom cloth became dearer by seven per cent, hessain and sacking bags prices up by five per cent, hessian cloth prices up by one per cent. But coir yarn prices declined by three per cent.

After staying dormant for 13 weeks, the index for rubber and plastic products fell by 0.1 per cent because camel back prices came down by five per cent.

With drugs, medicines and linseed oil prices up by three per cent each and basic heavy inorganic chemicals prices up by two per cent, the index for chemicals and chemical products shot up by 0.7 per cent to 274.6 from 272.7. However, superphosphate p205 content and synthetic rubber prices fell by one per cent each.

A hefty 11 per cent hike in prices of typewriters and one per cent rise in the prices of transformers jacked up the index for machinery and machine tools by 0.1 per cent to 301 from 300.7.

A four per cent increase in prices of jeeps pushed up the index for transport equipment and parts by 0.1 per cent to 281 from 280.6.

A marginal fall in prices of house service meters pulled down the index for other miscellaneous manufacturing industries by 0.1 per cent to 181.3 from 181.4 after staying static for almost 13 weeks.

The index for fuel, power, light and lubricants remained unchanged at its previous week's level of 380.4. Other indices that remained static were minerals, beverages, tobacco and tobacco products, paper and paper products, leather and leather products, non-metallic mineral products and basic metal, alloys and metal products.

UNI