High prices of primary food articles, including wheat, pulses, fruits and milk, and manufactured products pushed up inflation in 2006-07, whose first half saw GDP expand by 9.1 per cent despite poor farm sector growth.
In its Macroeconomic and Monetary Developments report released ahead of the third quarter review of monetary policy, the apex bank said primary articles' contribution to the overall year-on-year inflation as on January 13, 2007 increased to 34 per cent from 29 per cent a year ago.
The headline inflation, which is based on the Wholesale Price Index, touched six per cent from 4.1 per cent at end of March 2006 and 4.2 per cent a year ago.
"The year-on-year inflation, excluding the fuel group at 6.6 per cent was above the headline inflation rate of six per cent as on January 13, 2007," the apex bank stated.
Among the major groups, wheat prices increased by 14.7 per cent as on January 13, 2007, pulses increased by 25.4 per cent while fruit and milk prices by 12 per cent and 7.6 per cent respectively, the RBI stated.
"Overall the prices of primary articles have increased by 10.3 per cent since end-March 2006," RBI said.
Reflecting higher order of rise in food prices, the consumer price index numbers have remained higher than WPI inflation since November 2005, the central bank said.
The consumer price inflation for industrial workers stood at 6.3 per cent in November 2006 while that for urban non-manual employees, agricultural labourers and rural labourers was placed at 6.9 per cent, 8.9 per cent and 8.3 per cent, respectively in December 2006.
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