Inflation in India spurted to 8.56 per cent in January — the highest in 13 months and up from 7.31 per cent in December — according to government figures released on Monday.
It has, thus, already surpassed the Reserve Bank of India’s estimate of 8.5 per cent inflation by the end of March.While food inflation has been high for months now, it is the rise in prices
The cost of industrial inputs has been rising as the global recovery from last year’s downturn boosts commodity prices on the back of higher demand for crude oil, iron ore and coal.
Domestic prices of naphtha, furnace oil, bitumen and coal have increased sharply in the past month. So have the costs of chemical products, iron, steel and machinery tools, the latest wholesale price data showed.
Consumer durables companies said they wouldn’t hesitate to pass on the high cost of inputs to consumers. “We are holding on to prices despite a sharp rise in the cost of some inputs. We will take a decision after the budget on February 26,” said Ravinder Zutshi, deputy managing director, Samsung India.
The Petroleum Ministry has been pressing hard for an upward revision of fuel prices. If the government concedes, overall prices will rise further.
“We expect inflation to touch double digits by March,” said Sonal Varma, of brokerage and research firm Nomura Financial Advisory.
While the Congress was reticent, the BJP blamed the high prices on government policies.
“It is the mismanagement of the economy by the UPA government that is leading to inflation,” said Ravi Shankar Prasad, the party’s spokesperson.