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February 23, 2001                                       Feedback  

    - EXIM POLICY '00


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Inflation rate to fall by next month end: Survey


The inflation rate is likely to fall to around seven per cent by the end of next month, compared to the peak level of 8.29 per cent witnessed this January, said the Economic Survey 2000-01.

The Survey, tabled in Parliament Friday, traced the sharp increase in the administered prices of petroleum products such as liquid petroleum gas, aviation turbine fuel and kerosene in March and September 2000 as a major factor that contributed for the high rate of inflation this fiscal.

The figure, which stood at 6.75 per cent at the commencement of the year, could have been contained at four per cent but for the steep hike influenced by international price escalation in the petroleum products, the survey pointed out.

The inflation figure recorded on January 20 was also the highest since 1996-97. The petroleum price hike was also a major contributory factor accounting for 58.6 per cent for the general price rise.

A three to four per cent of continued growth in manufactured prices was in conformity with the stability trend recorded since 1996-97.

Good performance on the agricultural front in 1999-2000, adequate buffer stocks of food grains and improved supply of essential commodities such as edible oils, sugar and pulses helped contain prices of primary articles during the year and prices of manufactured products remained below three per cent.

Stability in prices had sobering effect on the inflation rate despite the sharp increase in administered prices of energy products.

The Survey said the prices of 16 of the 30 essential commodities such as rice, wheat, atta, edible oil and tea were lower than that of the previous year, and but milk, some pulses and kerosene has recorded a sharp increase.

The Government is following an effective supply of management policy to ensure stability and moderation in prices of sensitive essential commodities. Prices and availability of these items are being closely monitored.

Dwelling on the price situation of the past decades (1980-81 to 2000-2001), the survey said the average annual rise in price was eight to ten per cent. The growth in prices, both wholesale and retail, had been low in the past five years with manufactured products recording relatively lowest annual rise of 4.1 per cent.


Economic Survey 2000-2001
Budget 2001

Read the Economic Survey

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