Downplaying the recent surge in WPI inflation, which touched the two-year high of 5.04 per cent recently, the Economic Survey on Thursday asserted that the stability in primary and manufactured products would keep the general price line under control.
"The stability in primary and manufactured products group will help keep inflation under control," the survey said but cautioned that the domestic energy prices was likely to shoot up in the short run due to disruption of supplies and in case of war in the Gulf region.
The latest Gulf-related uncertainty had caused fuel price inflation to touch 6.4 per cent in mid-January 2003, it said, adding, "the uptrend in petroleum prices is now beginning to cause some inflationay undercurrent."
Digressing from the realities, it said the price rise in primary products, which hurts the poor the most, was likely to be subdued during the next financial year due to the surplus availability of essential commodities -- foodgrains and sugar, for the next financial year though the country witnessed "one of the worst droughts in nearly one and a half decades in this year.
"The abundant stocks of wheat (28.8 million tonnes) and rice (19.4 million tonnes) held by IFCI (on January 1, 2003), while complicating the task of agriculture diversification and fiscal consolidation, did, however, help to quell inflation pulls," it said.
The Antyodaya scheme, which supplied the rice and wheat at subsidised rate for the poorest of poor, helped dampen the prices in the market, it added.