Inflation slides due to fuel price cut

India's inflation, as measured by the wholesale price index (WPI), fell sharply in the last week of January after the Government cut retail price of fuels to match a sharp fall in crude oil prices. The point-to-point inflation declined to 4.39% in the week ended January 31 from 5.07% in the previous week, the Commerce & Industry Ministry said in a statement. Inflation was forecast to slip to around 4.4%. It was at 4.74% in the comparable period of last year. The WPI for "All Commodities" declined by 0.74% to 228.4 from 230.1 in the previous week.

The sharp fall in WPI and inflation was largely due to the fuel price cut that was announced by the Government on January 28. The Government had reduced the price of petrol by Rs5 per litre, diesel by Rs2 a litre and cooking gas by Rs25 per cylinder. Meanwhile, the Government inflation rate for the week ended Dec. 6, to 6.56% from the preliminary estimate of 6.84% while the WPI for the same period was revised to 230.5 from 231.1 earlier.