INFLATION MAGIC

Inflation plummeted to a three year low of 6.62 per cent in January, but gave no respite to common man as prices of essential kitchen items like onion and potato continued to rule high. The inflation rate, measured by movement in wholesale prices, moderated for the fourth consecutive month in January mainly on account of lower price rise of manufactured goods. The WPI inflation was 7.18 per cent in December and 7.24 per cent in November. It was 7.23 per cent in January, 2012. Food and primary articles have shown higher annual price rise, led by onion (111.52 per cent) and potato (79.07 per cent). Besides wheat, vegetables, rice and cereals too became dearer. Commenting on the inflation numbers, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said it would further decline to 6.5 per cent by March end, but asked the government to release more food stock to ease price situation. "Retail inflation is still high. WPI inflation in primary and food articles are still at higher levels. Efforts should be made to release larger stocks of food articles in the market," Rangarajan said. Retail inflation stood at 10.79 per cent in January mainly on account of higher prices of vegetables, edible oil, cereals and protein-based items. As per official data, inflation in manufactured items category fell 4.81 per cent in January from a year earlier, compared with an annual rise 5.04 per cent in December. Inflation in food items and primary articles category was at 11.88 per cent and 10.31 per cent respectively in January. Fuel prices rose 7.06 per cent in January, compared to 9.38 per cent in December. A likely increase in prices of diesel and petrol will reflect in February inflation number, which will be available next month.