Inflation falls to 3-decade low of -1.74%

Inflation dipped to -1.74 per cent for the week ended August 1, the lowest in three decades, even as prices of essential food items like pulses, cereals fruit and vegetables continued to rise.

The wholesale price index during the corresponding week a year ago was as high as 12.91 per cent, while in the previous week, it stood at (-) 1.58 per cent.

During the week, prices of barley, jowar and gram rose by two per cent and condiments and spices, arhar and fruits and vegetables by one per cent each.

At the same time, imported edible oil, sugar and unrefined oil got expensive.

Imported edible oil became costlier by 5 per cent over the previous week, unrefined oil by 3 per cent and sugar by one per cent. Among manufactured goods, prices of beer and alcohol rose 13 per cent, woollen cloth and texturised yarn 2 per cent, benzene 9 per cent and electrodes 22 per cent.

However, cement, iron and steel prices softened marginally. During the week prices of aviation turbine fuel increased by 2 per cent. Year-on-year, the prices of milk were up nearly 4.8 per cent, while spices were more expensive by about 4.2 per cent.

Among manufactured food products, processed fish turned dearer by more than 42.7 per cent over the last year, while sugar, khandsari and gur went up about 32.8 per cent.

Admitting that prices of essential commodities like pulses, sugar and some vegetables rose, Singh had said, "In order to contain increase in prices of essential commodities, the central government and the state governments will have to work together and activise the public distribution system, ... ... which is an important safety net especially for the poor and helps cushion them against price rise."

Singh had also said the government will do 'everything possible' to put the lid on food inflation.

Image: A man selling pulses. Photograph: Reuters