New Delhi: India’s inflation averaged 4.5% in the financial year that ended on March 2008, lower than an average 5.4% in the previous year, Finance Minister P Chidambaram said on 22 April.
In a written reply to parliament, Chidambaram said the quarterly average of wholesale price-based inflation increased to 5.2% during January-March, from 3.4% in October-December and 4.1% in July-September of 2007.
India’s headline inflation hit a three-year high of 7.41% in late March, but eased to 7.14% in the 12 months to April 5, as the government cut import duties on edible oils and banned export of rice and cement to increase supplies.
“Containment of inflation remains high on the agenda of the government,” Chidambaram said.
The Reserve Bank of India announced a hike in the cash reserve ratio, the proportion of deposits banks must keep with it, by 50 basis points to 8%. The rise will take place in two phases, on April 26 and May 10.
“The monetary policy of Reserve Bank of India, while being conducive to economic growth, has attempted to contain inflationary expectations arising out of uncertainties in domestic and international environment,” Chidambaram said.
In a separate reply, Junior Finance Minister Pawan Kumar Bansal said the price index for 30 essential commodities rose 5.27% during 2007-08 compared with 3.64 % in the previous fiscal year. Food price index as a whole rose 7.26% in 2007-08.
He said the price index for rapeseed and mustard oil were up by 31.6%, while that of groundnut oil rose 12.7% and vanaspati by 11.5% during 2007-08. Among pulses, the price index for masur rose 30% and arhar by 15.2%. The index for rice was up by 8.2% while it was 5.1% higher for wheat.