Though homemakers might not have complained of higher prices of essential items like vegetables, fruits and cereals, the sudden spurt in onion prices to over Rs 25 per kg after the monsoons angered them.
Commuters cursed government for hiking diesel and petrol prices by over 10 per cent that raised transportation costs significantly, as global oil price crossed $70 a barrel.
The government only passed on a very small portion of the fuel price hike on to domestic consumers and shared the rest with oil PSUs to ease inflationary pressures.
The dream of many middle-class households of owning a cosy flat could not materialise this year as builders raised prices of dwelling units, following rise in steel, cement and other materials and passed on the service tax burden.
Yet, 2005 showcased India's strong economic fundamentals and resilience of withstanding the shocks of high global oil prices and yet ending up with an average inflation of about 4.7 per cent in 2005, much lower than last year's average of about 6 per cent.
While many oil importing countries saw slowdown in growth due to high inflation, India is poised to improve GDP growth to 7.5 per cent this fiscal from 6.9 per cent in 2004-05.
However, Finance Minister P Chidambaram made it amply clear that government will not hesitate to take measures to check price rise.
Though WPI inflation has been the indicator of price movements in India for decades. The government has identified the lacunae and initiated steps towards moving to a realistic way of measuring price rise based on producer's price index.
A working group is on the job for suggesting ways of switching to PPI from WPI. The group is also going into details of how to revise and carry out necessary modifications in the formulation of WPI series by including 'selected services', as well as Consumer Price Index series on the basis of changes in the consumption pattern and basket of goods involved.
Labour bureau would release the revised index after considering the views expressed by experts, employers and employee organisations and government officials to the Ministry of Labour.
The need for change in WPI calculations came after it was observed that there was a wide gap between the wholesale and consumer index prices.
While WPI inflation was well over 4 per cent, the CPI inflation for industrial workers was in the range of 4 per cent while it 4.4 per cent for urban non-manual employees, 3.2 per cent for agriculture labourers and less than 3 per cent for rural labourers till October.
CPI inflation for farm labourers increased to 4.65 per cent while that for rural labourers surged to 4.62 per cent in November.
During the year, the maximum price rise was witnessed in fuel, power, light and lubricants group of the WPI index followed by manufactured products and primary articles.
The highest prices rise was for mineral oils comprising LPG, petrol, diesel, aviation fuel, bitumen, naphtha, furnace oil and lubricants.
Electricity charges rose due to shortfall in supply that led to power cuts in major metros like Delhi and Mumbai.
As if power cuts were not enough, the urban populace fumed over hike in power tariff and the false billings by energy companies.
During 2005, coal prices surged hitting the bottomline of thermal power companies and making life all the more difficult for the poor.
The boom in the manufacturing sector was also accompanied by a rise in some of essential products like sugar, gur, wine & liquor, iron & steel, chemicals, drugs & medicine, fertilisers and pesticides, cigarettes and tobacco, motor vehicles and aluminium. Only edible oil and textiles became cheaper.
© 2025