In a pleasant break from a clutch of disappointing macro-economic numbers released in recent days, reflecting the dismal state of the economy, headline inflation eased to a three-year low at 6.62 per cent in January, 2013, to provide some solace to the authorities and a level of comfort to India Inc. for demanding a further reduction in interest rates.
Even as the slide in WPI (wholesale price index) inflation in January this fiscal marks a steady month-wise decline from 7.24 per cent in November and 7.18 per cent in December and also lower than the level of 7.23 per cent in January, 2012, the deceleration in the price spiral provided no significant relief to the common man as essential edibles and greens continued to rule at higher levels.
The WPI data released here on Thursday shows that while moderation in inflation over the last few months has been primarily on account of lower manufacturing inflation or, in effect, a slower pace of price rise in manufactured goods, inflation in food and primary articles has continued to remain at higher levels. Leading the price spiral were basic staples such as onions and potatoes which were up 111.52 per cent and 79.07 per cent, respectively, on a year-on-year basis. Moreover, kitchen greens, protein-based items as well as wheat, rice and other cereals also turned dearer, which goes on to explain why retail inflation based on the consumer price index (CPI) inched up further to 10.79 per cent during the month.
Food inflation still high
Commenting on the WPI numbers, Prime Minister’s Economic Advisory Council (PMEAC) Chairman C. Rangarajan viewed that even though headline inflation would ease further to 6.5 per cent by the end of March, food inflation both at the consumer and wholesale levels were still high and called for release of more food stock. “Retail inflation is still high. WPI inflation in primary and food articles is still at higher levels. Efforts should be made to release larger stocks of food articles in the market,” he said.
As per the WPI data, inflation in manufactured items category eased to 4.81 per cent in January from a year-ago period and was lower than the level of 5.04 per cent in December. On the contrary, inflation in food items and primary articles category during the month was at 11.88 per cent and 10.31 per cent, respectively. Fuel prices also rose, though at a slower pace of 7.06 per cent in January.