Inflation fell below six per cent after more than two months and stood at 5.74 per cent during the last week of 2006-07 against 6.39 per cent a week ago despite rise in prices of major food products as well as some fuel and manufactured items.
This resulted in average inflation standing at 5.18 per cent for 2006-07, within Reserve Bank of India's projection of 5-5.5 per cent. Inflation had averaged 4.46 per cent during 2005-06.
The fall in inflation during the week ended March 31 might ease pressure on RBI to tighten monetary policy. But price data to be released next week would play a crucial role in RBI's annual monetary policy review slated for April 24.
Wholesale prices-based inflation had stood at 3.98 per cent during the corresponding week of 2006.
Inflation for the last week of 2006-07 softened despite increase in all
While prices of pulses, 15 lakh tonnes of which are slated to be imported in next 6-8 months, rose along with pork, ragi, bajra, milk, masur, gram, vegetables, raw rubber and soyabean; those of condiments, spices, fish marine, castor seed, copra, cotton and coconut oil declined.
The decline in inflation would also give some respite to the government, which has been struggling hard to bring down inflation within RBI's projection of 5-5.5 per cent. Rising prices have become a political scoring point in ongoing polls to Uttar Pradesh assembly and was also partly blamed for the Congress defeat in elections for Punjab and Uttarakhand assemblies and Delhi's local bodies.
