Dr. Avnish Jolly, Chandigarh June 20 :India’s annual inflation touched the record high in the same week during which the Central Government had announced large hikes in prices of petrol, diesel and cooking gas. It may be noted that Prime Minister’s Economic Council Chairman C Rangarajan had warned of a possible double-digit inflation rate on Thursday.
India’s annual inflation rate crossed the double digit mark to touch the 13 years high of 11.05 per cent for the week ended June 7, up from 8.5 per cent the previous week. Releasing the latest provisional inflation data, here, the country’s Commerce and Industry Ministry on Friday said that the jump was driven by steep rise in fuel, power, lubricants and Aviation Turbine Fuel (ATF) prices.
The Wholesale Price Index (WPI) for the fuel, power, light and lubricants group showed a 7.8 per cent rise and accounted in a big way for the high inflation rate, though the WPI for food articles actually declined 1.1 per cent during the week. The week ended June 7 also saw the WPI for light diesel oil rise 21 per cent, while liquified petroleum gas (LPG) jumped 20 per cent. The week also saw ATF prices jump 14 per cent, while that of petrol, high speed diesel and bitumen went up by 11 per cent, 10 per cent and seven per cent, respectively.
The WPI for non-food items went up by 1.4 per cent, largely due higher prices of niger seed (13 per cent), raw cotton and mustard seed (four per cent), and raw jute and ginglee seed (two per cent).
The Ministry adjusted the provisional inflation figure of 7.33 per cent for the week ended April 12 to arrive at the final figure of 7.95 per cent.
The RBI made a surprise interest rate rise last week, its first in more than a year, after a government decision to increase state-set fuel prices and economists said more monetary tightening was likely in a bid to calm inflationary expectations.
The country’s apex bank—Reserve Bank of India—also raised interest rate rise last week, its first in more than a year, after a government decision to increase state-set fuel prices and economists said more monetary tightening was likely in a bid to calm inflationary expectations.