Inflation dips to 0.48 per cent after four-week rise

New Delhi: India's annual rate of inflation fell to 0.48 per cent for the week ended May 2 from 0.7 the week before, official data showed on Thursday.

The annual rate of inflation has been rising for four consecutive weeks since the week ended April 4, when it was at 0.18 per cent, and reached 0.7 per cent the week ended April 26 before dipping to 0.48 per cent.

Among the three main commodity groups, the indices for manufactured products and primary articles rose 0.4 per cent.

The index for fuel, power, light and lubricants rose 0.2 per cent to 323.7 (provisional) from 323 (provisional) for the previous week due to higher prices of furnace oil, naphtha and light diesel oil.

However, the index of bitumen and aviation turbine fuel declined 1 per cent.

Between May 2 and April 26, the wholesale price index rose 0.4 percent to 231.6 (provisional) from 230.7 (provisional) the week before, data released by the commerce and industry ministry showed.

Declining inflation rate does not necessarily mean that prices have fallen, but that the rate of rise in prices has come down.

Sri Ram Khanna, the head of the commerce department at Delhi School of Economics, said despite a dip in the inflation to 0.48 per cent, the overall economic scene signals a recovery from the slowdown.

"There has been bumper production of wheat this year. We heard that there is no space to store grains. These are signs of recovery and the economy would witness it from September onwards," said Khanna.

He, however, remained apprehensive about the revival of exports.

"Exports are dependent on the external factor. But internal growth is catching up. So, practically it's an indication that we are already moving out of the slowdown," Khanna said.

According to Dalip Kumar, head of projects at the National Council of Applied Economic Research (NCAER), a Delhi-based think tank, it is the wholesale inflation that has come down.

"Retail prices continue to rise. So, consumers are yet to reap the benefit of lower inflation," he said, adding: "We have excellent production of food grains. But the cost of food commodities and fruits have gone up."