Overall inflation measured
in terms of Wholesale Price Index (WBI) averaged 9.56% in 2010-11, 8.94% in
2011-12 and was placed at 7.45% in October, 2012.
Government monitors the price
situation regularly and price stability remains high on its agenda. Necessary
fiscal, monetary and administrative measures have been taken to contain
inflation.
Both WPI and the Consumer Price
Indices (CPIs) have only a partial coverage of service sector. Inflation based
on implicit GDP deflator is more comprehensive measure of underlying inflation
for this sector. Comparative picture of inflation for manufacturing and service
sector based on implicit GDP deflator is indicated below:
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Table 1: Year-on-year inflation
based on sectoral deflator of GDP (%)
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Manufacturing Sector
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Service Sector
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2011-12 RE
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7.24
|
7.98
|
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2012-13 Q1
|
5.14
|
7.31
|
|
2012-13 Q2
|
6.05
|
7.68
|
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Notes: RE: Revised
Estimates, Q1: First Quarter, Q2: Second Quarter
Services Sector includes trade, Transport
& Communications; Financing & Insurance; and Community & personal
services.
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The non-food manufacturing product (excluding
urea fertilizers) and petroleum products (except kerosene, LPG and diesel) are tradeables. Domestic prices for these products are governed
both by domestic availability of these products and the global commodity
prices. Inflation for food, fuel and manufactured products often gets
generalised resulting in higher inflation for services sector also.
Besides the monetary measures which
operate on demand side, Government has been taking steps to reduce supply
related bottlenecks. Since the production and investment in these sectors is
largely dependent on the business expectation and conductive investment
climate, Government has taken various measures to improve business sentiments.
It has also announced a road map for fiscal consolidation and has reduced
uncertainty/apprehension relating to some of the provisions of the tax policy.
Regulatory clearances for major projects are also being expedited to improve
investment and production capacity in non-food manufacturing sectors. While no
target has been set for a level of inflation for manufacturing and service
sectors, these measures are expected to contain inflation.
This was stated by the Hon’ble Minister of Finance Shri P. Chidambaram in a written reply
to a question in the Rajya Sabha
today.
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