For the first time after the government took drastic steps to rein in runaway price rise, inflation slipped to 7.14 per cent in the week ended April 5, 2008, down by 0.27 per cent over the previous week.
In the previous week inflation had surged to a 40-month high of 7.41 per cent, mounting pressure on the Reserve Bank to further tighten money supply in its forthcoming annual credit policy later this month.
The wholesale price based inflation came down despite increase in prices of vegetables, pulses, tea, coconut oil and oil cakes. The prices of fruits, gur, cotton seed oil and other edible oils, however, declined during the week ending April 5.
The prices of steel alloys and aviation turbine fuel also increased during the week.
The inflation was down because of base effect, as it was quite high at 6.44 per cent in the corresponding week last year.
It declined in the first week of the current fiscal after touching the 40-month high of 7.41 per cent for the week ended March 29.
The inflation for the week ended February 9 was revised to 4.98 per cent as compared to provision figure of 4.35 per cent.
Some of the drop in prices has come about because of the move by some states to do away with octroi, etc on essential commodities.
The high inflation may prompt RBI to take tough monetary measures to ease out inflationary pressure in its annual credit policy, scheduled to be announced on April 29.
On Thursday, Prime Minister Manmohan Singh had even stated that high food prices may hurt economic growth and economic reforms process.
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