Friday, May 2, 2008

Inflation at highest level in more than three years

The wholesale price index rose 7.57% in 12 months to 19 April 2008, accelerating from the previous week`s annual rise of 7.33%, government data released today, showed. The rate was the highest since a reading of 7.68% on 13 November 2004.

During the reporting week, prices of tea shot up by 17 per cent, even as other food items like milk, rice, vegetables and mutton became dearer.

Among other commodities, the prices of light diesel oil and furnace oil went up by 2 per cent and by 1 per cent respectively.

In the manufactured products category cast iron pipes jumped by 51 per cent, pig iron by 8 per cent and steel sheets by 2 per cent.

The annual rate of inflation, based on Wholesale Price Index (WPI), has been rising despite fiscal and monetary measures taken by the government recently.

While the government has banned export of certain commodities like non-basmati rice and pulses and reduced customs duties on various other items to rein in inflation, the Reserve Bank of India (RBI) has raised the Cash Reserve Ratio (CRR) to suck excess liquidity from the market

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