New Delhi, Aug 14: India's headline inflation, based on wholesale price index (WPI), for July 2012 rose 6.87% over the same month last year when it was at 9.36%. In the previous month it was at 7.25%.
The inflation slowed to its lowest level in six months in July, mainly driven by lower fuel prices. The easing pressure on inflation front might add pressure on the central bank to ease policy rates as the country's industrial growth contracted 1.8% on-year in June.
The inflation in primary article category, with weight-age of 20.12% in WPI, in July surged 10.39% on-year as compared to 11.47% recorded in July 2011.
Food inflation, constantly moving upward from negative in January, surged to 10.06% in July easing marginally from 10.81% recorded in June. In the corresponding month last year it was at 8.19%. Non-Food inflation in July surged to 13.05% on-year, almost doubling from 6.85% recoded in June, in the corresponding month last year it was at 15.77%.
Fuel and power inflation in the reporting month also surged marginally to 12.04%, as against 10.27% in June.
Inflation in manufacturing product, with weightage of 64.97% in WPI, surged to 7.73% in July over the same period last year, significantly moving up from 5.00% in June.
Asia's third largest economy, once applauded for its growth potential, is once again heading towards the classical Hindu growth rate of 5% mainly driven by policy bottlenecks and external factors like debt crisis in eurozone and lesser than expected recovery of the US economy. In the first quarter India's GDP growth touched nine-year low of 5.3%.
Meanwhile, the country's industrial growth after showing some positive trend in May once again moved to negative 1.8% in June. With forcast of Monsoon failure, RBI would definitely continue to focus on inflation control and along with press government to work on fiscal control.