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Inflation at 13-month high — 6.68 pc New Delhi, March 28 After remaining close to 4 per cent for many months, wholesale price-based inflation has begun moving upwards, and has raised concerns among political circles as well. Although inflation rate was expected to remain at above 6 per cent, but 6.68 pc mark is shocking, which has been led by a surge in global commodity and food prices coupled with higher vegetable prices at home, said HDFC Bank chief economist Abheek Baruah. Economists feel the government and the RBI would have to take fiscal and monetary measures to contain inflation, which could
other wise move beyond 7 per cent. The RBI is scheduled to announce its annual monetary policy on April 29, and decide on the benchmark interest rates keeping in view the rising inflation and the need to maintain high growth. The prices of steel products have gone up by 4.4 per cent to 10.9 per cent within a week, while prices of vegetables moved up by 2.5 per cent and edible oil by 0.7 per cent within a week. Naphtha prices went up by 7 per cent, followed by 2 per cent rise in furnace oil and 1 per cent increase in electricity, light diesel oil for the week ended March 15. Baruah said the inflation rate could have been much higher had the government decided to fully pass on the hike in international crude oil price, which has crossed $110 a barrel. The government had increased the per litre price of petrol and diesel by Rs 2 and Re 1 respectively on February 14, to partially pass on the hike in crude oil prices. Analysts said high inflation rate would also have “cost-push” impact on the
manufacturing sector, leading to rise in prices of consumer goods. The government on its part is trying to increase the supplies of 40 items, including steel, cement and rice by withdrawing incentives.
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Rising Inflation New Delhi, March 28 Lalu is learnt to have conveyed his concern over the increase in prices of food items as it has hit the poor man hard and stressed the urgency of initiating effective measures to contain the current inflationary trend. “We know the government does not have a magic wand to solve this problem. But we all need to sit together and find a way of dealing with the situation,” Lalu said after his meeting with Sonia Gandhi. Although members of the ruling coalition have periodically expressed concern over rising prices, this is the first time that a UPA leader has personally brought this to the notice of Sonia Gandhi. The Congress party’s partners are clearly feeling the heat, as they are afraid they will end up paying a heavy electoral price for the government’s inability to check prices of essential commodities. The RJD chief’s SOS to Sonia comes on a day when the surge in prices of food items and metals has pushed inflation by 6.68 per cent, the highest-ever in the past one year. As it happens, the UPA government is at the receiving end from the Left and the BJP who are competing with each other in attacking it for having failed the ‘aam admi’. The BJP and the Left parties have described price rise as the biggest failure of the UPA and have planned a series of nation-wide protest rallies to highlight this issue.
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