Inflation cools to 9.59% in April

New Delhi, May 14 (PTI) Inflation in India cooled to 9.59
per cent in April, although prices of a number of food items
and non-food items such as metals rose.
The fall is partly due to a high base effect - which
means the inflation numbers in the year-ago period had already
started rising making the current rate of growth look
relatively small.
Last year this time, inflation was 1.31 per cent, against
1.2 per cent in March 2009. In March this year, wholesale
prices-based inflation was at 9.90 per cent.
In Kolkata city in east India, the Indian government's
chief economic advisor Kaushik Basu said inflation would
fluctuate in the next three months before falling.
HDFC Chief Economist Abheek Barua said, "May numbers
could be around 8.5 per cent as the base was quite high last
year. Although there might be some increase in June because of
base effect."
With inflation easing, economists do not anticipate any
immediate policy actions from the Reserve Bank as industrial
growth is showing signs of deceleration and the Eurozone debt
crisis may affect fund flows.
Factory production in March expanded by a slower than
expected 13.5 per cent. Elsewhere, the stock markets turned
edgy after investors worried about the efficacy of a Euro 110
package approved by EU-IMF to bail out Greece from its debt
obligations.
"With the global uncertainty and lower than expected
March industrial growth numbers, RBI would not adopt any
drastic step and rather resort to a gradual approach towards
rate hike," said StanChart Bank Regional Head of Research,
India, Samiran Chakraborty.
According to the monthly inflation data, potato prices
fell 28.70 per cent in April, and onion prices dropped 11.62
per cent.
However, vegetables overall rose 31.90 per cent, which
means that prices, except for potatoes and onions, are rising
much faster.
Sugar prices fell by 5.74 per cent on monthly basis, but
turned costlier compared to last year.
For April, food inflation stood at 16.87 per cent against
16.65 per cent in the previous month with prices of pulses
rising by 2.47 per cent and milk by 2.96 per cent.
On yearly basis, these prices rise much faster--pulses by
30.42 per cent and milk by 21.95 per cent.
Also fuel prices rose 12.55 per cent, essentially because
the Budget hiked customs and excise duty on petrol and diesel.
The main area of concern, however, remained metal, since
hardening global prices are putting pressure on domestic
rates.
Iron and steel prices rose 11.40 per cent in April on
monthly basis and basic metal alloys and metal products turned
expensive by 6.72 per cent. PTI JD
MRD


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