Inflation Driven by Primary Articles: Care - The New Indian Express

Inflation Driven by Primary Articles: Care

Published: 03rd March 2014 01:30 AM

Last Updated: 03rd March 2014 01:30 AM

Food items contributed the highest share in overall price index at a whopping 35.7 per cent and are primarily responsible for spiralling inflation, said Care Ratings.

Food grain inflation was driven by cereals including rice (5.7 per cent) and wheat (1.9 per cent). Among food items, which though have only 14.3 per cent weight, contributed 31 per cent to the overall price index, while food grains with just 4.1 per cent weight ramped the index by 6.5 per cent. Cereals with 3.4 per cent weight have 7.6 per cent share in index, and pulses, carrying 0.7 per cent weight, have -1.2 per cent share.

It means though food articles have 35.7 per cent share in primary articles basket, their contribution to the total is 31.5 per cent, with four products groups-cereals, vegetables, eggs meat and fish & milk products accounting for 27.5 per cent inflation.

Manufacturing at 30.9 per cent contributed proportionately the least to overall inflation with most of the inflation being contributed by textiles with a  share of 7.4 per cent. The manufactured items basket, though comprises the highest weight, contributes the least to the overall inflation index.

This is despite primary articles having only 20.1 per cent weight in the overall inflation basket, but contributing a 35.7 per cent spike in the overall price index, followed by fuel and power basket, which has the lowest weight (14.9 per cent), contributing to 33.4 per cent to the overall inflation.

Against this, the manufactured products basket, which has the largest weight of 65 per cent in the inflation basket, has contributed the least to the price spiral at 30.9 per cent, it said.

The data, based on the WPI and CPI numbers for January, 2014, is the latest inflation reading, Care said.

Non-food articles contributed just 4.5 per cent, most of which comes from fibres (4 per cent).

Fuel and power chipped in 33.4 per cent of overall inflation with a weight of just about 15 per cent, most of which came from mineral oils, with a share of 25.3 per cent.

Share of power stood at 13 per cent, most of which came from industrial (5% and farm power (4.2 per cent.

Unlike WPI inflation, share of vegetables in CPI inflation is lower at 4.6 per cent. Miscellaneous items like education,

medical care, recreation and amusement, transport and communication and household requisites contributed 20.4 per cent to retail inflation. Housing contributed 11.2 per cent to overall CPI inflation.

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