Inflation soars to 11.91%; political storm brewing around prices

New Delhi, Jul 17 (UNI) To add to the growing woes of the government facing a trust vote on July 22, inflation rate today touched a 13-year high of 11.91 per cent for the week ended July 5 from 11.89 per cent in the previous week.

The basic culprit which fuelled inflation was the Group 'Fuel, Power, Light and Lubricants' which went up by 0.5 per cent.

The 'Primary Articles' Group was down by 0.1 per cent, while the Group relating to manufactured products moved up by 0.3 per cent.

It is the 21st consecutive week that the inflation rate has been above 5.5 per cent, the target set by the Reserve Bank of India for the current fiscal.

The index for 'Food Articles' group declined by 0.2 per cent to 234.4 (Provisional) from 234.8 (Provisional) for the previous week largely due to lower prices of fruit and vegetables (1 per cent).

However, the prices of tea moved up by 2 per cent and maize, masur and moong moved up by 1 per cent.

Under the category 'Manufactured Products,'the index for 'Food Products' group declined by 0.5 per cent.

In the 'Food Products' Group the prices of rice bran oil and maida moved up by 2 per cent each; and prices of cotton seed oil, atta, coconut oil, imported edible oil and gingelly oil increased by 1 per cent each.

The index for 'Textiles' group rose by 0.1 per cent due to higher prices of hessian cloth and hessian and sacking bags by 2 per cent each and texturised yarn by 1 per cent.

The government, however, downplayed the data,saying Wholesale Price Index (WPI) on a week-on-week basis has "stabilised," prices of essential commodities too have "more or less stabilised," the index for 'Primary Articles' Group has declined and a large of number of manufactured products have moved downwards.

The soaring inflation rate has moved to the centre stage of the political drama being enacted in the country, even though political parties are giving different reasons for their disaffection with the government.

The government has departed from its time old practice of releasing the data on Friday morning and will henceforth issue details about the Wholesale Price Index (WPI) on Thursday evening.

One of the ideas in bringing about the change is to prevent speculations in the markets.

Despite government's persistent efforts to bring down prices using an array of instruments, including a tight monetary policy and fiscal measures to make exports more difficult and imports easier, prices do not show any sign of relenting.

Week after week the data released by the government comes as bad news for the State, Corporates, not to speak of the common man.

The reverberations of the high inflation rate are now being felt in the domain of growth with fears that the economy may not clock the targetted 8.5 per cent for the current fiscal.

The ghost of inflation appears and re-appears everywhere and has not even spared the bourses and the overseas investing community.

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