Inflation soars to new 13-year high of 11.42%

Inflation soars to new 13-year high of 11.42%
PTI
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First Published: Fri, Jun 27 2008. 02 03 PM IST
Updated: Fri, Jun 27 2008. 02 03 PM IST
New Delhi: Pushed by higher prices of food articles including milk, cereals, tea, edible oils and some manufactured items like soaps and detergents, inflation soared to 11.42% for the week ending 14 June.
The inflation number was higher by 0.37% over the figure recorded during the previous week. Inflation was 4.13 in the corresponding week a year ago.
At 11.42%, it has breached a high of 11.11% witnessed on 6 May 1995, but was still below 16.9% recorded in March that year.
During the week, the prices of tea went up by 3%, milk by 1%, sunflower oil by 4%, vanaspati by 2% and imported edible oil, salt mustard oil by 1% each.
At the same time, items of daily use like soap became expensive by 8%, detergents by 9%, hair oil by 1%.
Besides, fuel items especially lubricants became dearer by 19%, while prices of steel products like wire ropes and steel wire shot up by 36% and 25% respectively.
Galloping inflation may further prompt government and Reserve Bank to take steps to tame price rise.
According to Finance Minister P Chidambaram, “It (inflation) will remain in double digits for some more weeks.”
The government and RBI have already taken measures to control inflation, he said, adding that “if necessary we will not hesitate to take more fiscal and monetary measures.”
In a bid to contain inflation, RBI earlier in the week increased the short term lending rate to banks and the mandatory deposits which banks are required to park with the central bank by 0.5% each.
If inflation continues to remain high, RBI may take further monetary measures to tame inflation, Crisil Principle Economist D K Joshi told the news agency.
However, Finance Minister’s Adviser Subhashish Gangopadhyay told reporters here that inflation would remain in double digit for some more weeks even if prices fall due to base effect, and that the government should not be expected to take steps just because inflation is in double digit.
Exuding confidence in anti-inflationary steps, Commerce and Industry Minister Kamal Nath had said on 26 June, “It is going to go up by another 0.2 or 0.3%. But we are hoping that in the next two months, we will have some effects of the measures we have taken.”
“I think we are peaking out on inflation. The figures are going to peak now. We will soon be starting a decline,” he had said.
Much to the respite of the ‘aam aadmi’, prices of fruits and vegetable and masur declined by 1% each during the week. At the same time, prices of groundnut seed dipped by 1%, linseed 3% and cotton 2%.
In the manufactured goods category, prices of safety matches decreased by 2%, toothpaste and gur by 1% each. Among mineral group, prices of metallic minerals were up by 4%.
The items which contributed to high inflation also included texturised yarn whose prices shot up by 16%, benzene 22%, pvc resins by 17%, thinners by 16%, enamels by 10% and electric motors by 12%.
As per the revised WPI data, the inflation rate for the week ended 19 April was 8.23% as against the provisional figure of 7.57%.
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First Published: Fri, Jun 27 2008. 02 03 PM IST
More Topics: India | Inflation | WPI | RBI | CRR |