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Inflation crosses 5% mark due to higher food prices

Written by: Staff
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New Delhi, Sep 10 (UNI) Despite the government taking steps to contain inflation below five per cent in the current fiscal, the annual rate of inflation crossed the five per cent mark to stand at 5.01 per cent for the week ended August 26, due to an increase in food prices.

However, the Finance Minister P Chidambaram has said that the government will not hesitate to take monetary and fiscal steps to contain inflation as and when necessary. The aim would be to keep the inflation at 4.5 per cent to 5 per cent during the current fiscal.

''Our tolerance for inflation has come down. We will keep inflation at tolerable levels,'' the Minister says.

The rate of inflation stood at 4.91 per cent last week.

The government had, last week, allowed the private traders to import wheat duty-free, in a bid to bring the prices down. ''Private traders can import wheat at zero duty instead of the current 5 per cent,'' Agriculture and Food Minister Sharad Pawar had said.

The inflation rate, calculated on point-to-point basis, was 3.33 per cent during the corresponding week of the previous year, according to official figures released here today.

The Wholesale Price Index (WPI) for all commodities for the week ended August 26, 2006, rose by 0.1 per cent to 205.3 from 205.1 last week.

The index for the Primary Articles group rose by 0.3 per cent to 205.7 from 205.0 for the previous week.

The index for Food Articles group rose by 0.4 per cent to 207.0 from 206.2 for the previous week due to higher prices of bajra and gram (4 per cent each), maize and wheat (3 per cent each), arhar (2 per cent) and fruits and vegetables and jowar (1 per cent each).

However, the prices of fish-inland (6 per cent), moong (2 per cent) and urad(1 per cent) declined.

The index for Non-Food Articles group rose by 0.4 per cent to 186.7 from 185.9 for the previous week due to higher prices of niger seed (9 per cent), raw silk (3 per cent), raw cotton (2 per cent) and castor seed, cotton seed, linseed, groundnut seed, gingelly seed and copra (1 per cent each).

However, the prices of raw rubber (2 per cent) declined.

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