Inflation falls to 5%

In line with the Centre's expectation of a benign price level, inflation fell further to 5.11 per cent in the penultimate week of 2004-05 fiscal, but was higher than 4.53 per cent a year-ago.

The widely-tracked wholesale price index inflation, which had peaked to 8.74 per cent in August, came down to 5.11 per cent in the week ended March 19 mainly due to cheaper primary articles like food and non-food items and cooking gas (LPG) and edible oils.

However, vegetables, certain manufactured products and fuel products like naphtha became costlier. Though global oil prices had crossed $57 a barrel, oil PSUs had not hiked prices since November 2004, and this, market analysts said could keep the average price level benign during 2004-05.

However, it could have an effect in the new fiscal beginning today. Unlike point-to-point inflation, WPI remained unchanged at the previous week's estimate of 189.1 points although heavy weighted manufactured products became costlier. Indices of primary articles and fuels, however, fell.

Both government and the Reserve Bank had taken "measured" steps to rein in the price level during the third quarter of last financial year.