India's inflation hits 41-month high of 7.41 per cent

As per data released by the Commerce and Industry Ministry today, India's annual rate of inflation rose further to hit a 41-month high of 7.41 per cent for the week ended March 29, from 7 per cent for the week before, on account of higher food and commodities prices.

New Delhi: As per data released by the Commerce and Industry Ministry today, India's annual rate of inflation rose further to hit a 41-month high of 7.41 per cent for the week ended March 29, from 7 per cent for the week before, on account of higher food and commodities prices. The inflation rate, based on the official wholesale price index, is the highest since November 8, 2004.

Since the data pertained to March 29, it did not reflect the measures taken by the government since March 31 when it cut import duties on a wide range of items including edible oils, while imposing a ban on exports of non-basmati rice. The alarming data comes a day after Prime Minister Manmohan Singh said that the steep increase in prices of food and essential items was making inflation management a difficult task that could hurt the country's macroeconomic stability.

"Sharply rising food prices can slow down poverty alleviation, impede economic growth and retard employment generation," Prime Minister Manmohan Singh said at a global conference on agro industries on Thursday. He warned, "A steep rise in food prices will make inflation control more difficult and can hurt the cause of macroeconomic stability. The constituency for economic reform, so necessary to stimulate economic growth, would also diminish."

The Reserve Bank of India (RBI) has already said that it will take monetary and fiscal steps to contain inflation - which it had hoped to contain below the five per cent mark for the fiscal year ended March 31. Analysts now expect the central bank to take some immediate steps to check inflationary pressures, like hiking the benchmark interest rate to control the supply of money in the financial system.

The International Monetary Fund (IMF) has forecast India's inflation to moderate to 5.2 per cent in the current calendar year and four per cent in 2009, as against 6.4 per cent in 2007. (IANS)

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