Inflation soars to 5.92 percent

March 20th, 2008 - 9:47 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, March 20 (IANS) India’s wholesale price index-based inflation rate soared to a 12-month high of 5.92 percent in the week ending March 8 against 5.11 percent in the preceding week. This is for the third such time that inflation breached the five percent mark, the target set by the central bank for 2007-08.

This is the highest ever rise since April 28, 2007 when the inflation hit 6.01 percent.

The annual inflation rate was 6.51 percent during the corresponding week of the previous year.

The rise has been mainly due to higher food prices and also surge in retail prices of fuel.

According to Finance Minister P. Chidambaram, taming inflation is the government’s “topmost priority” and it is looking at taking “necessary fiscal steps to curb prices” such as reducing import and excise duties.

The government announced a ban on export of all edible oils with effect from March 17 for a period of one year to curb their rising prices.

Chairman of the Prime Minister’s Economic Advisory Council C. Rangarajan Monday said the current rate of inflation was a “little above comfort level” and did not support a policy that promotes cut in interest rates.

The core areas of India’s infrastructure sector such as oil, power, cement and coal have witnessed a poor growth rate of 4.2 percent in January, against 8.3 percent in the like month of last year.

India’s industrial output also plummeted to 5.3 percent in January, against 11.6 percent in the same period last year, due to severe monetary measures by the central bank.

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