RISING prices of some manufactured items and industrial oils pushed up inflation to 3.93% for the week ended January 19, although a few food items such as eggs turned cheaper on fears of bird flu in some parts of the country.
The wholesale prices-based inflation was at 3.83% in the previous week and 6.31% during the corresponding week a year ago. Although the price index is still below Reserve Bank’s target of less than five per cent for this year, inflation may rise further with the government likely to take a decision on hiking prices of petroleum products soon. This could explain RBI’s steady stance on interest rates at a time when many were expecting a rate cut to spur slowing industrial production.
Announcing its quarterly credit review, RBI Governor Y V Reddy had said: “Inflation is broadly in line, but not as comfortable that we lift our vigil on stability.” Finance Minister P Chidambaram had also said yesterday: “We are confident that if keep firm hands on the wheel, the Indian economy will sail through turbulent waters. We are maintaining a balance between growth and inflation.”
This is the first inflation data released after the RBI’s announcement of its credit review on January 29, but took into account price figures of two weeks ago.
While prices of industrial oil like furnace oil rose by two per cent, light diesel oil went up by one per cent. Some manufactured products like textiles, metals and food products also became costlier, while prices of primary food items like vegetables and pulses came down.