Agencies
New Delhi, April 11:
Much to the chagrin of the government, unabated rising prices of vegetables, food articles and steel pushed the inflation to a 40 month high of 7.41 per cent, casting a shadow on economic growth.
Growing for the eighth consecutive week, inflation, based on wholesale price index, rose by 0.41 per cent in the week ended March 29 from 7 per cent in the previous week, a development that could lead to tightening of the monetary policy likely to be announced this month by RBI.
Inflation, which was 6.54 per cent a year-ago, last touched 7.76 per cent during the week ended November 6, 2004.
The common man was affected most by the surging prices of vegetables that showed an increase of 4.1 per cent during the week, while spices and pluses became dearer by 1.2 per cent and 1.8 per cent respectively in the wholesale market.
Price rise in these commodities would be much higher in the retail market going by the traditional difference in WPI and consumer price index.
Prime Minister Manmohan Singh on Thursday admitted that surging food prices were making it difficult to manage inflation but ruled out any "blind controls".
To make things difficult for the economy, steel, alloys, and other metals led the rising prices in the industrial sector.
While steel prices shot up by 5.6 per cent, basic metals became dearer by about five per cent during the week even as the government went into a tizzy to find solutions through a slew of fiscal measures and supply side management.
No 'magic band' to control: Govt
Terming soaring inflation rate as a global phenomenon, the government today said it has no "magic band" to bring it down immediately though it is taking and will take all possible steps to contain price rise. "Government has no magic band to bring down inflation which is now a global phenomenon.
Due to rise in prices worldwide, it has become rather an import inflation," Minister of Earth, Science and Technology Kapil Sibal told reporters while briefing the mediapersons after the Cabinet meeting. According to official figures, inflation has touched a 40-month high of 7.
41 per cent for the week ended March 29. Referring to World Bank figures, Sibal said prices of agricultural commodities have gone up by 73 per cent in the international market during the period between August 2007 to March 2008 period.
It included 88 per cent rise in prices of food products, followed by 74 per cent rise in wheat prices, 72 per cent in rice prices, 71 per cent in fat and oil prices and 35 per cent increase in sugar prices, he said. "Inflation is at a very high level in all emerging markets such as China (8.7 per cent), Russia (11.9 per cent), Argentina (7.3 per cent) and Turkey (8.1 per cent)," he said, adding the government was taking all necessary steps to contain inflation.
Elaborating on the measures taken by the government to contain inflation, Sibal said state governments have been asked to put limits on stocks of foodgrain. Ruling out an increase subsidies, he said efforts were being made to contain prices through duty cuts and other measures.
The poor people were supported through public distribution system, he added.
Industry growth slows down to less than 9pc
Industrial growth slowed down to 8.6 per cent during February from 11 per cent recorded in the year ago, thus dashing hopes of even a nine per cent growth in the crucial sector during fiscal 2007-08. Afflicted by a poor showing in the crucial manufacturing sector, the industrial growth was 8.7 per cent during the first eleven months of the current fiscal, down from 11.2 per cent in the previous year.
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