Inflation will average 9 per cent in FY'11,compared to 3.6 per cent in the preceding fiscal,a leading economic think-tank has said. "Unseasonal rainfall in October and November,2010,damaged production of some crops,including onions. In addition,exports of cotton and sugar have been permitted.Incorporating all these factors,we estimate that inflation will average 9 per cent in 2010-11,as compared to 3.6 per cent in the preceding fiscal," the Centre for Monitoring Indian Economy (CMIE) said in its latest review of the country's economy. Between April and December,2010,inflation was 9.4 per cent,compared to 1.7 per cent in the corresponding period of 2009. "Major contributors include fruits,milk,eggs-meat-fish,condiments-spices,raw cotton,fuel and power,textiles and basic metals,alloys and metal products," the CMIE said. The think-tank foresees inflation coming down to 8.1 per cent in the fourth quarter of the current fiscal from 10.6 per cent in the first quarter and 9.3 per cent in the second quarter. In the third quarter ending December,2010,it was 8.3 per cent. "Looking at developments at the sectoral level in the remaining period of 2010-11,we expect that the year-on-year changes in WPI of food articles will be higher at 16.8 per cent on account of higher inflation in milk,vegetables,fruits and eggs-meat-fish," it said. Likewise,inflation in the fuel group is expected to drop from 14 per cent in the first-quarter of 2010-11 to 10 per cent in the last quarter. In manufactured goods it is expected to drop from 6 per cent to 3.5 per cent,it said. Among manufactured goods,inflation in food products,beverages,textiles,wood and wood products,chemicals and chemical products and basic metals will be lower in the last quarter of FY'11 than in the quarter ended June,2010,CMIE said. "Looking at developments at the sectoral level in the remaining period of 2010-11,we expect that the year-on-year changes in WPI of food articles will be higher at 16.8 per cent,on account of higher inflation in milk,vegetables,fruits and eggs-meat-fish," it said. Likewise,inflation in the fuel group is expected to drop from 14 per cent in the first-quarter of 2010-11 to 10 per cent in the last quarter. In manufactured goods it is expected to drop from six per cent to 3.5 per cent,it said. Among manufactured goods,inflation in food products,beverages,textiles,wood and wood products,chemicals and chemical products and basic metals will be lower in the last quarter of FY 11 than in the first-quarter ended June 2010,CMIE said.
