Agencies

New Delhi, Nov 13: The wholesale price index rate fell sharply to 8.98% for the week ended November 1 on account of declining prices of fuel and manufactured goods. Inflation slipped to single digit after 21 weeks.

The rate came down by 1.74 percentage points from 10.72% in the previous week.

This development should bring cheer to the UPA government ahead of the state assembly elections. Six states go to the polls from November 14. Political observers feel that this news will provide breathing space to the Congress during the poll camapign as price rise has become one of the major issues in these elections. If prices had continued to go through the roof, Congress would have found itself on the defensive in the elections, say observers.

The inflation rate was 3.35% a year ago. The prices of commodities which have declined during the week include fuel items like naphtha, jet fuel, furnace oil and light diesel oil.

Naphtha prices fell sharply by 33%, followed by jet fuel, which fell by 18%, and furnace oil, which declined by 13%.

Light diesel oil prices declined by 6%. The sharp decline in prices that are not administered by the government follows the drop in crude prices in the international market, which slipped from a high of USD 147 a barrel in July to less than USD 60 a barrel currently.

Apart from fuel items, prices of manufactured products also showed a decline. The Manufactured Products Index, which has a weight of around 64%, declined by 0.7% mainly due to lower prices of imported edible oil, which declined by 8%, and unrefined oil, which fell by one%.

Prices of iron and steel fell by 7% while cement prices remained unchanged.

Fruit and vegetable prices also went down marginally by 0.1%, tea prices by 2%, spices prices by one%.

The inflation rate for the week ended September 9 was revised upwards to 12.42% from the provisional estimates of 12.14%.