A gradual easing in the food price spiral brought down overall inflation to its 11-month low at 7.48 per cent in November from 8.58 per cent in the previous month, raising hopes that it will eventually decline to the desired level of about 5.5-6 per cent by the end of the fiscal.
With this, the Wholesale Price Index-based headline inflation has not only fallen close to its December 2009 low of 7.31 per cent but has also vindicated Chief Economic Advisor Kaushik Basu's projection earlier this month that the overall price spiral would be around 7.50 per cent for November.
Commenting on the WPI data, Pranab Mukherjee said: “I am delighted with the latest headline inflation figures…These numbers take us another step towards our forecast of 6 per cent inflation by March 2011…With WPI inflation declining by more than one percentage point, it now stands at 7.48 per cent. Inflation in food, including primary products and manufactured products, is now down to 6.11 per cent. Last month this was at 9.97 per cent”. Mr. Mukherjee pointed out that the only segment where inflation had gone up was in non-food primary articles owing to increases in the prices of coir fibre, copra, safflower and a few other items. “Fortunately, these goods form a small part of our total product basket and so their overall effect is small,” he said.
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Voicing satisfaction over reining in inflation, Planning Commission Deputy Chairman Montek Singh Ahluwalia said: “inflation is comfortable. I think it does vindicate the government's proposition that we are not facing an accelerating inflation or inflation that is out control”.
The WPI data released here on Tuesday shows that, barring onions which have turned dearer by over 29 per cent on an annual basis, prices of most other food items either declined or changed very little.