The Hindu : Front Page : Inflation reaches 40-month high

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Saturday, Apr 12, 2008
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Inflation reaches 40-month high

Sandeep Joshi

Opposition blames Centre for situation

NEW DELHI: Inflation reached a 40-month high of 7.41 per cent on Friday as vegetables, fruits, pulses and metals became dearer.

While the Centre said rise in prices in the international market was behind the soaring inflation and promised more steps to contain it, Opposition parties, including the Left Front, accused the government of not taking enough steps.

The prices of vegetables went up by 4.1 per cent, while pulses and spices became dearer by 1.8 per cent and 1.2 per cent respectively during the week ended March 29. Similarly, steel prices registered a sharp increase of 5.6 per cent.

The prices of ‘masur’ and ‘urad’ went up by three per cent, while that of wheat and marine products rose by one per cent. Fodder and raw jute prices went up by two per cent and that of linseed by one per cent. The prices of milk and maize went down by one per cent.

Similarly, basic metals became dearer by about 5 per cent and prices of minerals went up by 0.2 per cent, mainly due to the steep hike in limestone prices by 14 per cent. However, the prices of fuel and lubricants remained unchanged.

Experts said the effect of spiralling inflation could be much severe on the common man considering the traditional difference in the wholesale price index and the consumer price index.

It could also have a negative impact on economic growth, they added.

Inflation has been rising continuously for the past two months.

It last touched 7.76 per cent during the week ended November 6, 2004.

The Centre said it had already announced various anti-inflationary measures, whose impact would be felt in the next few weeks.

It has asked State governments to sternly deal with hoarders and blackmarketeers.

Science and Technology Minister Kapil Sibal told a press conference that soaring inflation was a global phenomenon. “The Government has no magic wand to bring down inflation. Due to rise in prices worldwide, it has become rather an import inflation,” he said.

He said inflation was at a very high level in all the emerging markets including Russia (11.9 per cent), China (8.7 per cent), Turkey (8.1 per cent) and Argentina (7.3 per cent).

Referring to World Bank figures, Mr. Sibal said prices of agricultural commodities went up by 73 per cent in the international market between August 2007 and March 2008.

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