New Delhi/Bangalore, May 2
Inflation soared to a 42-month high of 7.57 per cent for the week ended April 19 on account of higher prices of vegetables, food articles, steel and some fuel items. The wholesale price-based inflation rose 0.24 percentage points from 7.33 per cent in the previous week despite concerted efforts by the government and the Reserve Bank to check price rise.

However, finance minister P Chidambaram exuded confidence that inflation would be tamed and he appealed to the people to have faith in the government and keep patience.

"Inflation will be tamed... contained. My only appeal to the people is to be patient and have faith. The current spurt is because of international developments", the finance minister said in Bangalore.

While government announced slew of measures sacrificing a revenue of more than Rs 6,300 crore to contain inflation, RBI increased Cash Reserve Ratio (proportion of banks' deposits maintained with the apex bank in cash) in three tranches to tighten money supply.

An increase of 0.75 per cent in CRR is expected to suck out about Rs 27,500 crore from the banking system.

"Steps taken by government and RBI would lead to easing of inflationary pressure in future and it can come down to 5.5 per cent," Crisil economist D K Joshi told PTI.

The common man was affected the most by surging prices of milk and rice that showed an increase of 1 per cent each, while vegetables were dearer by 0.3 per cent. Prices of tea went up by 17 per cent and mutton by two per cent, while steel products became expensive by as much as 51 per cent. Inflation, which was 6.07 per cent a year ago, had last reached the high of 7.76 per cent for the week ended November 6, 2004.

The Left parties today urged the government to resort to “hard decisions” to curb inflation, while asking the party units all over the country to intensify the ongoing anti-price rise agitation. — PTI, UNI