Inflation drops to 8.98 | Can Govt cash in?

SOME RELIEF: With growing economic crisis, the drop in inflation has come as a relief.

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New Delhi: Inflation has dipped to 8.98 per cent for the week ended November 1 on account of declining prices of fuel and manufactured goods.

The rate came down by 1.74 percentage points from 10.72 per cent in the previous week and is in single digits after 21 weeks and must be a good news for the Union Government.

Just an year ago, the inflation rate was 3.35 per cent.

The manufacturing wholesale price index is down by 0.7 per cent while aviation turbine fuel prices are down by 18 per cent. Fuel and power are down 3.4 per cent.

All commodities are down over 1.3 per cent.

Naphtha prices fell sharply by 33 per cent, followed by jet fuel, which fell by 18 per cent, and furnace oil, which declined by 13 per cent.

Light diesel oil prices declined by six per cent.

The sharp decline in prices that are not administered by the government follows the drop in crude prices in the international market, which slipped from a high of $147 a barrel in July to less than $60 a barrel currently.

Apart from fuel items, prices of manufactured products also showed a decline. The Manufactured Products Index, which has a weight of around 64 per cent, declined by 0.7 per cent mainly due to lower prices of imported edible oil, which declined by eight per cent, and unrefined oil, which fell by one per cent.

Prices of iron and steel fell by seven per cent while cement prices remained unchanged.

Fruit and vegetable prices also went down marginally by 0.1 per cent, tea prices by two per cent, spices prices by one per cent.

Meanwhile, inflation for the week ended September 6 was revised up to 12.42 per cent from 12.14 per cent.

(With inputs from PTI)