Consumer price inflation falls by 0.4% in Dec; rural areas witness sharp drop

Decline in prices of food items, such as fruit and vegetables have brought the consumer price index (CPI) down by 0.44% m-o-m in December 2011. As per the data released by the Ministry of Statistics & Programme Implementation, based on retail prices, the CPI stood at 113.9 points in December compared with 114.4 points in November. Further, numbers were released separately for the urban, rural areas and combined showed a fall of 0.78%, 0.09% and 0.44% respectively on m-o-m basis.

As depicted by the numbers, the fall was more in the rural areas than the urban. The fall was mainly on account of cheaper vegetables which saw a dip of 15.01% m-o-m to 98.5 points. The fruit index also fell by 3.78% to 122.2 points. Similarly, the index for condiments and spices fell by 1% to 123.9 points. At the all-India level, the CPI for 'food, beverages and tobacco' in December fell by 1% to 112.8 points from 114.3 points in the previous month.

In December, the CPI for 'clothing, bedding and footwear' stood at 122.2 points on an all-India basis, compared to 121.5 points in November, an increase of around 1%.  In addition, the prices in the 'fuel and light' segment rose marginally in December vis-a-vis the previous month, with the index moving up to 120.0 points from 119.6 points in November.

The index for 'Housing' in December stood at 112.2 points, up by 1.17% m-o-m basis from 110.9 points in November. This is the sixth month that housing prices were factored into the CPI data. However, the data was compiled only for urban areas. The government earlier said house rent was negligible for the rural areas, and as such, only urban areas were taken into account for the index on housing. Further, the index for 'Miscellaneous' was flat at 112.8 points on a nationwide basis in the month under review, compared to 112.7 points in the previous month.

For the whole year, Kerala has seen the sharpest rise in prices among states with inflation from January-December at 16%. Union territories like Daman and Diu, Dadra and Nagar Haveli and small state like Manipur have done the best to tame inflation with the hike being at less than 10%. The ministry also mentioned that the annual inflation rates would be available at the time of release of indices for January, 2012. The indices for January are scheduled to be released on February 21.