Slew of fiscal measures taken recently by the Centre to contain price rise appear to have started showing results with the inflation declining marginally to 7.14 per cent in the week ended April 5.

The inflation in the previous week ballooned to a 40-month high of 7.41 per cent.

But at 7.14 per cent it was still at a three-year high. HDFC Bank Chief Economist Abheek Barua attributed the decline to “direct fiscal steps taken by the government to check prices...rate of increase in prices in a number of food and manufactured items like edible oil, iron and steel have come down.”

Part of the decline, he added, could be attributed to base effect as the annual rate of inflation for the corresponding week last year was quite high at 6.44 per cent. The Wholesale Price Index-based inflation came down by 0.27 per cent over the previous week’s figure of 7.41 per cent despite increase in prices of vegetables, pulses, tea, coconut oil and oil cakes.

Mixed bag

However, the prices of fruits, gur, cotton seed oil and other edible oils declined during the week ending April 5.

The retail price of edible oil has come down after the government on March 31 drastically reduced import duty on wide range of edible oil. However, the prices of steel alloys and aviation turbine fuel increased during the week. 
Concerned over the rising prices the Centre took a series of fiscal measures like reduction in duty on import of rice, pulses and edible oils and ban on export of non-basmati rice and pulses.

As part of exercise to contain rises in prices of essential non-food items like steel and cement, the government has withdrawn all incentives on export of these items.