Finance minister vows more action as inflation rate hits a 42-month high of 7.57 per cent news
02 May 2008

Mumbai: Finance minister P Chidambaram has pledged more measures to tame inflation even as the annual rate of inflation the country rose to a 42-month high of 7.57 per cent.

The inflation rate based on the wholesale price index rose to a 42-month high of 7.57 per cent for the week ended April 19, up from 7.33 per cent a week ago, despite a slew of measures taken by the government to curtail spiralling prices.

The spike has largely been due to a 0.3 per cent rise in the wholesale price index of essential commodities such as rice, milk, tea, vegetables and some manufactured products.

The highest rise was recorded by tea, whose price shot up by 17 per cent while that of other food items like milk, rice, vegetables and mutton also went up.

Among other commodities, light diesel oil and furnace oil became dearer by two per cent and one per cent respectively. Among manufactured products, prices of cast iron pipes jumped by 51 per cent, pig iron by eight per cent and steel sheets by two per cent.

The government banned export of certain commodities like non-basmati rice and pulses, slapped export tax on steel and cement and reduced customs duties on various other items to rein in inflation.

The Reserve Bank of India (RBI) also raised the cash reserve ratio (CRR) to absorb excess liquidity from the market in a bid to check inflation.

Chidambaram, however, was hopeful that inflation will be tamed and food prices will come down sooner than other prices.

"The inflation will be tamed; food prices will come down sooner than other prices," he said on the sidelines of a function in Bangalore.

The government, he said, has already procured 154 lakh tonnes of wheat and 230 lakh tonnes of rice.


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Finance minister vows more action as inflation rate hits a 42-month high of 7.57 per cent