DATA ALERT: India Mar 29 headline inflation rises to 7.41%

[K.Karthik Raja]

DATA ALERT: India Mar 29 headline inflation rises to 7.41%
Friday, Apr 11

NEW DELHI - India's headline inflation rate rose to an over three-
year high
of 7.41% for the week ended Mar 29 from 7.00% a week earlier, the
commerce and
industry ministry said today.
The rise in inflation rate is mainly on account of increase in
prices of
iron and steel, vegetables and limestone.
This is the highest WPI inflation rate since 7.68% for the week to
Nov 6,
2004.
The inflation rate, based on Wholesale Price Index, was 5.94% in
the year
ago period.
The inflation rate for the week to Mar 29 is way above the Reserve
Bank of
India's March-end aim of "close to 5.0%".
In the week to Mar 29, the index for all commodities rose 0.5% to
226.0
from 224.8 a week earlier. In the corresponding week last year, the
index had
risen 0.1% on week to 210.4.
The latest inflation rate is above consensus estimates.
According to a NewsWire18 poll of 21 analysts, the inflation rate
was seen
falling marginally to 6.99%.
India's headline inflation rate has been steadily moving up since
October
due to a sharp rise in commodity prices.
RBI Governor Y.V. Reddy had last week said the spurt in inflation
was
"unacceptably high", stoking fears of monetary steps to tame it.
Earlier this month, the government announced a slew of fiscal
steps,
including duty cuts on food items and ban on non-basmati rice export
to curb
price rise. The government has also directed steel producers to
hold
prices of hot-rolled coils and cut prices of TMT bars.
Prime Minister Manmohan Singh Thursday said an abnormal rise in
global
food prices was making it difficult to control inflation and shortages
caused
by food crop diversion for bio-fuels had rendered food policy mapping
a
complex and uncertain exercise.
"The world, as a whole, is faced with a situation where rising
demand for
food is not being met with a similar supply side response," the prime
minister
said.
In the week to Mar 29, the WPI for main commodity groups was as
follows:
--Primary articles at 235.1, up 0.2% from 234.6 a week earlier;
food
articles 227.2, up 0.4% on week; non-food articles 226.6, down 0.3% on
week;
minerals 595.8, up 0.2% on week. Primary articles mainly comprise farm
goods
and minerals, and have 22% weight in WPI.
Within primary articles, prices of limestone (14%) and vegetables
(4%)
went up during the week.
--The fuel, power, light and lubricants group was at 341.4,
unchanged from
a week earlier. The group has 14.2% weight in the WPI.
--Manufactured products--with 63.7% weight in WPI--were at 197.1,
up 0.9%
from 195.4 a week earlier.
Within manufactured products, prices of heavy rails (33%), bars &
rods
(20%), heavy light structurals (9%), cast iron casting (8%) and
cottonseed oil
(4%) rose during the week.
All numbers are provisional and may be revised after eight weeks.
.
FINAL INDEX
The final index for all commodities for the week to Feb 2 was
218.8
compared with the provisional estimate of 217.4. Consequently, the
final
inflation rate for the week was 4.74%, compared with the provisional
4.07%.