Inflation breaches 12% mark
Primary articles, including fruits, milk, spices, and eggs, meat and fish led the surge
In manufactured products, iron and steel and edible oil were the major contributors
New Delhi, Aug. 7 Annual inflation, measured by the Wholesale Price Index, accelerated to 12.01 in the week ended July 26, the highest since April 1, 1995 and marginally above the 11.98 per cent annual increase in the previous reported week.
The surge in inflation was on account of surging primary articles, including fruits, milk, spices, and eggs, meat and fish, as well as mineral oils and iron and steel groups, official data released on Thursday showed.
The rise came a week after the Reserve Bank of India hiked its key short-term lending rate by a higher-than-expected half-a-percentage point and also raised the percentage of cash commercial banks must park with it in a bid to subdue spiralling inflation and curtail credit growth. The RBI has said it hopes to bring down inflation to seven per cent by the end of the current financial year.
During the latest reported week, inflation in primary articles rose 10.32 per cent on a year-on-year basis, with fruits (12 per cent), spices (13 per cent), eggs, meat and fish (7 per cent) and milk (8 per cent) among the major contributors. Inflation in manufactured products also moved up further to 10.75 per cent, with edible oils going up 17 per cent, malt liquor (10 per cent), and iron and steel (35 per cent), while inflation in the fuels group was up 17.11 per cent due to a 26.99 per cent rise in the mineral oils group.'News for comfort'
Commenting on the latest inflation numbers, the country's Chief Statistician, Dr Pronab Sen, said that headline inflation had flattened out. "This is news for comfort... Prices have flattened," he told reporters on the sidelines of a function. Dr Sen said cement and steel prices, which were the main drivers of inflation, have stabilised.
"The prices of these commodities would not have shown such a sharp rise, if we had the entire gamut of commodities in the index," he said. He said that restructuring of WPI, which is in the works, will not change the bigger picture.
He lauded the efforts of the RBI to rein in inflation, but warned that the Government should ensure high interest rates do not hamper growth. "The Government has to walk a tightrope. It has to see that it does not push industry to the brink," he said.
Meanwhile, continuing a trend of sharp upward revisions, final inflation for the week ended April 12 was revised up to 7.95 per cent from the provisional estimate of 7.33 per cent