On Friday, Finance Minister P Chidambaram said that he is confident that the government will soon control inflation. "It is worrisome, but we are confident of gaining mastery over inflation," he said. He further added that authorities might take more steps to control inflation if needed. Inflation has reached 8.1 per cent, marking fresh trouble for the United Progressive Alliance (UPA) Government, which has been desperately trying to rein in prices of oil and essential commodities in an electorally important year.
Wholesale prices climbed to 8.1 per cent in the week ended on May 17 from a year earlier, after rising to 7.82 per cent in the previous week, the government said on Friday.
Inflation had surged to a 44-month high of 7.83 per cent for the week ended May 3, before falling to 7.82 per cent the following week.
The inflation numbers are likely to cause problem to the Reserve Bank of India (RBI) as the rate is much higher than the target set by the bank. The central bank has targeted inflation at 5.5 per cent for the year FY 2007-08.
In order to suck liquidity from the market, the RBI last month had increased (Cash reserve ratio) CRR in two phases, to 8.25 per cent the highest since March 2001-from 7.5 per cent.