India’s inflation breaches 8 percent mark (Lead)

May 30th, 2008 - 2:47 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, May 30 (IANS) For the Indian government, that is contemplating a hike in fuel prices, Friday brought more disturbing news as the annual inflation rate breached the eight percent mark to reach 8.1 percent for the week ended May 17. At this level, the inflation, as measured from data on official wholesale price index, was the highest in three-and-a-half years. The latest rise was due to a 0.6 percent increase in prices of food articles during the week under review.

The data released by the commerce ministry Friday showed that the annual rate of inflation moved up to this level after having eased slightly to 7.82 percent for the week ended May 10 from 7.83 percent for the week before.

“There are no easy solutions to these issues. But we will find solutions to the pressing problems,” Finance Minister P. Chidambaram told a news conference here. “It is worrisome, but we are confident of gaining mastery over inflation.”

The data came against the backdrop of the Indian cabinet being set to bite the bullet by hiking prices of transport fuels to bail out state-run companies that are having to retail petroleum products at below cost.

The state-run oil companies have warned that their losses on account of selling fuels below cost could top Rs.200 billion ($5 billion) for the current fiscal year. They said they have money to buy fuels for only two-three months.

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