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9987
Fri, 06/13/2008 - 19:21
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Inflation touches the highest point in UPA regime
New Delhi, Jun 13 (PTI) - Inflation touched 8.75 percent by
May end, the highest during the United Progressive Alliance (UPA) government's tenure, mainly due to rising prices of food articles and vegetable amid fears that the recent increase in fuel prices would push it past 9 percent.
The latest figures of rate of rising prices for the week ending May 31, up from 8.24 percent in the preceding week, bring new worries to 'aam admi' leading to apprehension that costlier diesel prices would have a chain reaction.
The rising prices of milk, pulses, spices, fruit and vegetables continued to pose a major challenge before the Manmohan Singh government in an election year even as Finance Ministry in tandem with the Reserve Bank of India pursued tough policy and monetary measures to tame inflation.
The previous high in the UPA regime was 8.33 percent as per the provisional figure in the week ended August 28, 2004.
Analysts predict that once the impact of rise in prices of petrol, diesel and cooking gas, announced earlier this month, is taken into account the inflation, which is now at a seven-year high, would go past nine percent mark when early June figures come out.
As part of inflation control measures, the RBI had Wednesday increased the interest rate on its short-term lending to bank by 0.25 percent to eight percent, prompting the banks to consider a rise in lending rates for consumers and industry.
The inflation stood at 5.09 percent in the corresponding week a year ago.
For the week April 5, 2008, the government revised the figure upward to 7.71 percent from 7.14 percent shown provisionally on April 18.
The continuous rise in inflation has forced the banks to increase the interest rates which analyst feel could further add to the cost factor. However, the monetary measures are aimed at cooling high demand pushing prices up.
Most of the banks have the prime lending rates pegged at around 13 percent. Besides raising the short-term lending rate (repo rate), the Reserve Bank had also sucked over Rs.270 billion out of the economy by increasing the Cash Reserve Ratio.
The government has also taken several fiscal and administrative measures to cool the inflation which has become a worldwide concern because of skyrocketing crude oil prices.
The next week data, that would capture the petrol and diesel price hike, is likely to push the inflation rate past 9 percent.
Petroleum Secretary M.S. Srinivasan had said the hike could lead to an about 0.5-0.6 percent rise in inflation rate.
During the week, prices of fruits and vegetables rose by one percent, pulses 0.4 percent, eggs by four percent, spices by two percent and mutton mil and wheat by one percent each.
Among non-food articles, mustard seed became dearer by three percent, raw cotton by four percent, raw rubber by five percent, ground nut seed by two percent.
Among the manufactured items, mustard oil were expensive by six percent, cotton seed oil by three percent, groundnut oil and coconut oil by one percent.
However, prices of butter declined by one percent.
During the week, cement prices hardened marginally while beer and alcohol prices surged 10 percent, cotton yarn 16 percent, printing paper five percent, epoxy resins 16 percent, fireworks 12 percent and excavators 10 percent.
However, prices of zinc and lead ingots softened by five percent, sacking bags by three percent and Hessian cloth by two percent.
May end, the highest during the United Progressive Alliance (UPA) government's tenure, mainly due to rising prices of food articles and vegetable amid fears that the recent increase in fuel prices would push it past 9 percent.
The latest figures of rate of rising prices for the week ending May 31, up from 8.24 percent in the preceding week, bring new worries to 'aam admi' leading to apprehension that costlier diesel prices would have a chain reaction.
The rising prices of milk, pulses, spices, fruit and vegetables continued to pose a major challenge before the Manmohan Singh government in an election year even as Finance Ministry in tandem with the Reserve Bank of India pursued tough policy and monetary measures to tame inflation.
The previous high in the UPA regime was 8.33 percent as per the provisional figure in the week ended August 28, 2004.
Analysts predict that once the impact of rise in prices of petrol, diesel and cooking gas, announced earlier this month, is taken into account the inflation, which is now at a seven-year high, would go past nine percent mark when early June figures come out.
As part of inflation control measures, the RBI had Wednesday increased the interest rate on its short-term lending to bank by 0.25 percent to eight percent, prompting the banks to consider a rise in lending rates for consumers and industry.
The inflation stood at 5.09 percent in the corresponding week a year ago.
For the week April 5, 2008, the government revised the figure upward to 7.71 percent from 7.14 percent shown provisionally on April 18.
The continuous rise in inflation has forced the banks to increase the interest rates which analyst feel could further add to the cost factor. However, the monetary measures are aimed at cooling high demand pushing prices up.
Most of the banks have the prime lending rates pegged at around 13 percent. Besides raising the short-term lending rate (repo rate), the Reserve Bank had also sucked over Rs.270 billion out of the economy by increasing the Cash Reserve Ratio.
The government has also taken several fiscal and administrative measures to cool the inflation which has become a worldwide concern because of skyrocketing crude oil prices.
The next week data, that would capture the petrol and diesel price hike, is likely to push the inflation rate past 9 percent.
Petroleum Secretary M.S. Srinivasan had said the hike could lead to an about 0.5-0.6 percent rise in inflation rate.
During the week, prices of fruits and vegetables rose by one percent, pulses 0.4 percent, eggs by four percent, spices by two percent and mutton mil and wheat by one percent each.
Among non-food articles, mustard seed became dearer by three percent, raw cotton by four percent, raw rubber by five percent, ground nut seed by two percent.
Among the manufactured items, mustard oil were expensive by six percent, cotton seed oil by three percent, groundnut oil and coconut oil by one percent.
However, prices of butter declined by one percent.
During the week, cement prices hardened marginally while beer and alcohol prices surged 10 percent, cotton yarn 16 percent, printing paper five percent, epoxy resins 16 percent, fireworks 12 percent and excavators 10 percent.
However, prices of zinc and lead ingots softened by five percent, sacking bags by three percent and Hessian cloth by two percent.
