New Delhi: Inflation surged to over three-year high of 7.41% for the week ended 29 March, mounting pressure on the Reserve Bank of India to further tighten money supply in its forthcoming annual credit policy later this month.
Wholesale price-based inflation, which stood at 7% the previous week, surged this time mainly on account of rising prices of fruits and vegetables, pulses, cereals, condiment and spices and some manufactured items.
Inflation soared despite high base of 5.94% in the corresponding week a year ago, belying market expectations in the range of 7.05%.
The high inflation may prompt RBI to take tough monetary measures to ease out inflationary pressure in its annual credit policy, scheduled to be announced on 29 April.
Prime Minister Manmohan Singh had even stated that high food prices may hurt economic growth and economic reforms process.
During the week, prices of fruits and vegetables shot up by 3%, pulses went up by 1.2%, condiments and spices by 2%, wheat and fish marine each rose by 1%.
However, prices of milk and maize softened by 1%, at the same time, minerals group was up mainly driven by prices of limestone which jumped 14% and steatite also moved 2%.
In the manufactured category, sugar prices went expensive by 2%, groundnut oil and khandsari were dearer by 1%. However, prices of imported edible oil got cheaper by 5% and sunflower oil by 3%.