Inflation surges to 5.44 per cent | india | Hindustan Times
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Inflation surges to 5.44 per cent

Higher prices of pulses, fruits, vegetables and some fuels have further driven up inflation by 0.20%.

india Updated: Jun 30, 2006 14:13 IST

Higher prices of pulses, fruits, vegetables and some fuels have further driven up inflation by 0.20 per cent to over a year high at 5.44 per cent for the week ended June 17, as against 5.24 per cent in the previous week.

The inflation had crossed 5 per cent mark during the week ended June 10, 2006, for the first time this year but was lower than the previous high of 5.38 per cent during the week ended May 21, 2005.

A routine weekly data on wholesale prices-based inflation was released today, a day after the Congress Working Committee expressed concern over rising prices of essential items.

The data captured the cascading effect of the price hike in petrol and diesel but did not reflect anti-inflationary measures taken by the government on June 22.

The level of price rise could be gauged from the fact that the inflation was way down at 4.10 per cent during the corresponding week of the previous year ended June 18, 2005.

Alarmed by the price rise of essential commodities, the Government swung into action and initiated measures to augment supply of pulses, sugar and wheat.

It allowed duty free imports of pulses and sugar, and drastically slashed customs duty on wheat to five per cent from 50 per cent.

The government also suspended export of pulses till the festival of Diwali, which falls in October.

However, the partial effect of these measures would be factored into the inflation data to be released next week, which will capture the figures for the week ended June 24.

"Wheat, pulses and sugar are driving prices up, therefore, the decision has been taken to augment the supply side (through imports)," Finance Minister P Chidambaram had said, announcing the decision of the Cabinet Committee on Prices last week.

The inflation data shows that among these items, prices of pulses rose by 1.3 per cent during the week ended June 17, while sugar, khandsari and gur, in fact, became cheaper by 0.1 per cent.

The figures show only data on cereals and not particular items like wheat. The cereals prices rose by 0.2 per cent.

Another category which was driving up prices was vegetables, particularly tomatoes. The prices of vegetables as a group rose by four per cent during the week. The Government had described rising prices of vegetables as a seasonal factor.

Prices of cement, which were reportedly discussed at the CWC meeting, was marginally up by 0.5 per cent. Prices of steel also reportedly came up for discussion at the meeting but iron and steel in fact, became cheaper by 1 per cent.

"We are confident, that with these decisions, inflationary expectations will be dampened," he said adding there would be no cap on quantum of wheat and sugar imports.

The government also suspended export of pulses till the festival of Diwali, which falls in October.