India's annual food inflation, as measured by the wholesale price index or WPI for the week ended February 27, declined marginally to 17.81% from 17.87% reported in the previous week. However, the fuel inflation shot up due to hike in excise and customs duty proposed in the Budget.

The rate of inflation for the corresponding week in the preceding year was 7.44%. The 52-week average inflation for the week ended February 27 was 13.73%, data released by the Ministry of Commerce and Industry show.

Rate of inflation during the year under the 'Non-Food Articles' category increased to 13.60%, down from 13.77% in the previous week. The 52-week average inflation for the week ended February 27 was 2.66%.

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The annual rate of inflation for the week ended February 27 was 15.08%, slightly higher than the 15% for the last week. It was 5.55% for the corresponding week in the preceding year. The 52-week average inflation for the week under review was 9.78%, the data show.

They indicate the index for this group, with a weightage of 22.02%, rose by 0.35% from the preceding week.

The groups and items for which the index showed variations during the week are as follows:

Among the sub-groups, index for the 'Food Articles' category increased by 0.25% from last week, due to the higher prices of poultry chicken, barley, milk, fruits and vegetables. However, those of tea, gram, urad, arhar, condiments and spices, maize, fish-inland, fish-marine, masur, eggs and moong declined.

The index for the 'Non-Food Articles' group increased by 0.12% from last week, due to the higher prices of raw rubber and raw cotton, whereas those of gingely seed and groundnut seed declined.

The index for the 'Minerals' group increased by 3.18% from last week due to the higher prices of barytes, iron ore, asbestos and steatite, while those of magnesite and felspar declined.

Fuel, Power, Light & Lubricants

Annual rate of inflation for this category was 11.38%, compared to 9.59% for the previous week. It was minus 4.90% for the corresponding week in the preceding year. The 52-week average inflation for the week ended February 27 was minus 3.77%. The recent government decision to raise fuel prices has also stoked inflation.

The index for this major group, with a weightage of 14.23%, for the week under review rose by 1.63% due to increase in the prices of high speed diesel oil and petrol. However, the prices of furnace oil, bitumen, light diesel oil and naphtha declined.

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said the food prices would soften in the next two months and would bring down the overall inflation.

On the other hand, Apex Chamber II said the inflationary pressure was not expected to subside in the near future and the wholesale price-rise would be close to 9% by this month-end, based on the survey conducted on 100 CEOs. The Chamber has sought to maintain status quo in the policy rates by the Reserve Bank of India or RBI, which are taken as benchmarks for the interest rates.

Index With New Base Year

The new wholesale price based index for measuring inflation will be introduced from May 14 with base year 2004-05. Items like type writers and VCRs is likely to move out, paving way for mobile phones and LCD TVs to be included in the new index. Presently the WPI is calculated with 1993-94 as the base year.

The new index will have 250 new items, and is expected to provide a more realistic picture of price-rise and its impact on people.

As per the calendar, April data would be released on May 14 with the new base year, a senior official said.