The Hindu : Front Page : Inflation rate touches 6.12 %

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Saturday, Jan 20, 2007
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Inflation rate touches 6.12 %

Special Correspondent

NEW DELHI: Union Finance Minister P. Chidambaram on Friday said the Government would take all steps to contain rising prices, as rise in inflation was "indeed a matter of concern."

Official data released on Friday showed that inflation stood at 6.12 per cent for the week ended January 6, highest in the past two years.

In touch with RBI

Talking to newspersons on the sidelines of a Confederation of Indian Industry function here, Mr. Chidambaram said: "Ultimately, inflation is a monetary phenomenon and it is influenced by supply side. Hence, the Ministry of Finance is in touch with both the RBI and the Ministry of Agriculture and Consumer Affairs. We will watch the situation carefully and take whatever steps [that are] required to be taken."

Reading out a statement, the Minister said the Government had found that the rise in prices of items consumed daily by the common man, such as urad and arhar in pulses, tea, tomatoes and coconut, was causing concern.

Besides, a rise in the prices of a few manufactured products, such as steel and edible oils, had also come to the Government's notice.

Mr. Chidambaram said the rise in the wholesale price index-based inflation to 6.12 per cent was largely on account of the "base effect."

The price index for all commodities for the week ended January 6 moved only from 208.1 points to 208.2, a difference of 0.1 point.

On the other hand, in the same week the previous year the index declined by 0.9 points. "Hence, the base effect has triggered this rather sudden rise in WPI rate."

In fact, while the index for primary articles, as also that for fuel, power and lubricants had moved up slightly, the index for the manufactured products declined slightly during the week, he said.

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