Inflation drops to 8.40%.

Inflation fell for the fourth consecutive week to almost a five-month low at 8.40%, providing space for RBI to cut interest rates to spur economic growth amid fears of moderation.

The wholesale price index declined by 44 basis points (bps) for the week ended November 22, from 8.84% a week ago.

The annual rate of inflation stood at 3.11% as on Nov. 24, 2007 i.e. a year ago. Index for primary articles group rose marginally by 0.1% from the previous week.

In a move to deal with the global slowdown, the prime minister-chaired committee on December 2, cleared a blueprint of a fiscal and monetary package for cash-starved housing, export and financial sectors.

Simultaneous packages for finance, export and housing sectors will be announced by the government and the Reserve Bank probably by the week-end.

The index for food articles group rose by 0.4% from previous week`s level due to higher prices of coffee (6%), fish-marine and masur (3% each) and rice, eggs, arhar, fruits & vegetables and gram (1% each). However, the prices of maize and bajra (3% each) and ragi and tea (1% each) declined.

Meanwhile, the index for non-food articles` group declined by 0.6% due to lower prices of raw rubber (17%) and raw cotton (1%). However, the prices of sunflower and raw silk (1% each) moved up.

The index for fuel, power, light and lubricants group declined by 2.3% due to lower prices of furnace oil (23%), aviation turbine fuel (14%), naphtha (13%), light diesel oil (11%) and bitumen (8%).

Index for manufactured goods declined marginally by 0.2%. Food products index declined by 0.9% on account of lower prices of oil cakes (7%) and soyabean oil (6%). However, the prices of gur and coffee powder (3% each) and sugar (1%) moved up.

Textile group index declined by 0.1% due to lower prices of texturised yarn (5%).

Whereas, the index for basic metals, alloys, and metal products group declined by 0.2% due to lower prices of pipes & tubes (5%) and steel ingots (plain carbon) (3%). However, the prices of zinc ingots (2%) moved up. 

The index for machinery and machine tools group declined by 0.1% due to lower prices of telephone instruments (46%).

The index for rubber and plastic products group declined by 0.2% due to lower prices of PVC fitting and accessories (11%).