Tech & Biz

Inflation in India at 9-Month Low of 6.84%, on Lower Fuel Prices

by Sanjay Jha | December 18, 2008 at 02:38 am

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Deepening recession and declining crude price have forced the inflation further southward and India's annual inflation has dropped to a nine-month low to 6.84 from 8 per cent earlier.

The sharp drop was triggered largely by the drop in petrol and diesel prices. The inflation rate was 3.84 per cent during the corresponding week last year.

Inflation dipped by 1.16 percentage points from 8 per cent in the previous week, primarily on account of reduction in prices of petrol and diesel announced by the government in the first week of the month.

It was 6.21 per cent in the week ended March 1, 2008. The rate during the corresponding period last year was 3.84 per cent.

The government reduced the per liter prices of petrol and diesel by Rs 5 and Rs 2 respectively with effect from December 6 in the wake of falling prices of crude oil in the international market.

Also, the prices of those items which are not decided by the government came down during the week. The index of 'fuel, power, light and lubricants' fell by 3.7 per cent, as prices of petrol, jet fuel (Aviation Turbine Fuel), naphtha and furnace oil declined by 10 per cent, 7 per cent, 23 per cent and 15 per cent respectively.

Indian trade associations have expressed satisfaction over sharp decline of inflation. The ASSOCHAM President, Mr. Sajjan Jindal on Thursday demanded larger doses of bold steps by Reserve Bank of India (RBI) to boost economic growth.