Surge in prices of metal and food items pushed inflation rate growth by 6.68 per cent, the highest ever in the past one year, dashing hopes of a softer interest rate regime in the near future.
After remaining close to 4 per cent in recent months, inflation has begun moving upwards, and surged by 0.76 per cent during the week ended March 15.
It was 5.92 per cent in the previous week and 6.56 per cent in the corresponding period last year. In line with the global trends, metal prices continued to be more expensive. While joist and rolls rose by a whopping 34 per cent, heavy light structural were up by 32 per cent, bright bars by 24 per cent, basic pig iron and foundry pig iron by 17 per cent each and steel sheets, plates and strips by 13 per cent each. Food items, like vegetables, rape seeds and mustard oil also turned costlier.
Analysts said the announcement of Sixth Pay Commission recommendations, and provisions for enhanced expenditure on social sectors in the Budget 2008-09 coupled with rising crude oil prices have also raised expectations about high inflation.
The rise in inflation may not let RBI to go for a soft monetary stance and the central bank is expected to continue the tight interest rate policy. They also said that the government has to take further fiscal measures to contain the rising prices.