December 14, 2012 / 13:47 IST
Inflation declined marginally to 7.24 per cent in November from 9.46 per cent in the same month a year ago although prices of food items like potato, wheat, cereals, rice, pulses, edible oil and sugar went up during the period. Inflation, as measured by the Wholesale Price Index (WPI), stood at 7.45 per cent in the previous month. Food inflation, as a category, rose to 8.5 per cent during the month, from 8.32 per cent a year ago. Food articles have 14.3 per cent share in the WPI basket.
Also Read:Inflation at 7.24% in Nov, below expectations: Expert viewsOct IIP at better-than-expected 8.2%; rate cut hopes fadeIIP grows 8.2% in October, Chidambaram sees green shootsVegetables prices declined by 1.19 per cent in November this year as compared to surge of 10.68 per cent in same month a year ago. Potato and onion prices, however, shot up by 72.20 per cent and 17 per cent respectively year on year in November this year as compared to a decline of 9.31 per cent and 35.15 per cent in the same period last year. Wheat turned expensive by 23.19 per cent in November from a decline of 4.86 per cent in the same month a year ago. Cereals became dearer by 15.85 per cent from a rise of 2.15 per cent in the same month last year. Pulses and eggs, meat and fish became costlier by 19.10 per cent and 14.19 per cent in November. These food items also saw a surge in prices by 14.96 per cent and 11.40 per cent in November last year.For the fuel and power category, inflation moderated to 10.02 per cent during the month from 15.48 per cent in November 2011. However, diesel inflation increased by 14.60 per cent last month. In the manufactured items category, prices of cotton textiles, man-made textile, iron and steel paper and paper products, rubber and plastic products rose relatively at a lower pace compared to the same month of the previous year. The rate of price rise in the manufactured products was 5.41 per cent in November, as against 8.17 per cent in the corresponding month of last year. Inflation for September was revised upwards to 8.07 per cent from 7.81 per cent as per provisional estimates.Meanwhile, retail inflation in November moved up to 9.90 per cent, mainly on account of higher of sugar, vegetables, edible oil and clothing. The retail inflation stood at 9.75 per cent in October. Due to persistent high level of inflation, the Reserve Bank last month in its half-yearly monetary policy review kept the benchmark interest unchanged.But it slashed the cash reserve ratio (CRR) - the portion of deposits banks have to park with RBI - by 0.25 per cent so as to infuse additional liquidity of Rs 17,500 crore into the financial system. The CRR currently stands at 4.25 per cent. The central bank kept the repo rate, at which it lends to the banks, unchanged at 8 per cent. The reverse repo rate, at which RBI absorbs excess liquidity through borrowings from banks, is at 7 per cent.RBI Deputy Governor KC Chakrabarty yesterday said there is a possibility of cutting the repo rate only when inflation comes down. However, he expected inflation to come down in about two-three months. "We are trying to bring down inflation... There is a probability that inflation would come down in the next few months. In the next 2-3 months, inflation should come down," Chakrabarty had said. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
