he wholesale price index based inflation rate, witnessed steep decline in the week ending November 1. It currently stands at 8.98 percent as compared to 10.72 percent in the previous week. Leading economists and market experts, earlier forecasted single digit inflation only by next year.
The single digit inflation rate brings great respite to the central government as it is going through polls in states assemblies and general elections are also due next year.
Reserve Bank of India may take more monetary steps to ease liquidity and the recovery of normal annual growth rate. It has earlier taken many steps including revision of cash reserve ratio, SLR and Repo rate to ensure smooth and adequate money supply in the Indian financial system.
The recent steep fall in inflation rate is mainly due to the slump in the prices of various petroleum-based fuels such as naphtha, aviation turbine fuel (ATF), furnace oil and light diesel oil. Crude oil rate currently stands at $56-60 a barrel from $147 a barrel in July this year.
Meanwhile, inflation for 30 essential commodities increased to 7.74 per cent on a weekly basis from 7.51 per cent. The manufactured product index fell by 0.7 per cent following decline in the prices of edible oil. Prices of vegetables, fruits and tea also declined marginally in the reporting week.
