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Inflation touches 8.24%; more steps likely to cool prices
June 06, 2008 12:04 IST
Last Updated: June 06, 2008 14:14 IST
Inflation climbed to 8.24 per cent, a new high in 45 months, although essential food items like fruits and vegetables and spices turned cheaper, making the government think of more steps to ease prices.
The numbers for the week ending May 24 was 0.14 per cent higher than the 8.1 per cent recorded in the previous week. The rate stood at 5.15 per cent a year ago.
Finance Minister P Chidambaram admitted that inflation had become a problem, but said with people's support the rate of price rise could be beaten back.
But that may take awhile, as inflation is expected to balloon further after two weeks when the data would fully reflect the June 5 hike in retail fuel prices.
Chidambaram dismissed the main opposition BJP's criticism of the government on the price front, saying "to criticise... without going into causes of current inflationary trends and without offering concrete steps would amount to merely politicising the issue."
The BJP's National Executive had passed a resolution on prices criticising the government, and separately called the hike in petrol, diesel and cooking gas prices as unleashing of "economic terror" on the people by the UPA.
During the week, prices of fruits, vegetables, spices, salt, raw silk and cement, declined, but cereals, eggs, meat, fish, imported edible oil, paper and paper products, chemical, machinery and automobile parts turned expensive.
"Government of India, like governments all over the world, is fighting inflation. We have taken fiscal, monetary and administrative measures and we are willing to take more measures," Chidambaram said.
RBI too has said it would take all measures to curb inflationary expectations.
RBI Governor Y V Reddy had said "we are vigilant and ready to take all measures to curb inflationary expectations."
The inflation number (8.24 per cent) is provisional and is revised nearly two months down the line and usually ends up higher than the initial figures going by the experience off late.
If final figures are taken into account, inflation was higher than 8.24 per cent on nearly three occasions with the highest figure standing at 8.74 per cent during the week ended August 28, 2004.
Inflation figure for the week ended March 29 has been revised to 7.75 per cent from the provisional estimate of 7.41 per cent.
During the week under review, cereals prices were higher by 0.5 per cent while eggs, meat and fish category together rose by 0.4 per cent. At the same time, some non-food items like raw rubber, raw cotton and groundnut seeds became expensive by 1-2 per cent.
However, fuel, power, light and lubricants category remained static at the previous week's level despite volatile prices of crude oil in the international market.
Despite abolishing customs duty, prices of imported edible oil surged by 6 per cent. Among other manufactured items, prices of groundnut oil was up by one per cent, newsprint by eight per cent, paper and pulp by two per cent.
Prices of some chemicals like caustic soda also hardened in the range of 1-9 per cent, while cement prices cooled of a bit during the week.
Elsewhere, auto components became expensive by six per cent, cycle by one per cent, switch gear by five per cent and excavator by one per cent.