Inflation remains at 7.61 per cent; sign of prices stabilising:Gov

New Delhi, May 9 (UNI) The headline inflation rate for the week ended April 26 remained at a 42-month high of 7.61 per cent as compared to 7.57 per cent for the previous week on account of higher food prices, in a development that the government said was a sign prices had stabilised and would come down soon.

The annual inflation rate was 6.01 per cent during the corresponding week of the previous year, a statement said.

Finance Minister P Chidambaram, however, dismissed as ''statistically insignificant'' the 0.04 per cent hike in inflation and said the prices of essential commodities had begun to come down and this would be reflected in the inflation index after some time.

Talking to reporters after the weekly briefing on the decisions of the Union Cabinet, Mr Chidambaram said the inflation figure released today had come as a ''big relief'' as it showed that the prices had stabilised.

In fact, he had predicted that prices would be stable for some time before beginning the downward trend and this had come true, he pointed out.

The change in the second decimal (from 7.57 per cent to 7.61) was not statistically significant, he said.

Asked to explain the rise in the inflation figures, irrespective of the fact whether it was significant or not, he said the government had warned about it in the Budget.

The government and the RBI had taken steps with the intention and expectation that these would bear fruit. ''Text book economics says that it will bear fruit.'' The change in the second decimal (from 7.57 per cent to 7.61) was not statistically significant, he said.

Asked to explain the rise in the inflation figures, irrespective of the fact whether it was significant or not, he said the government had warned about it in the Budget.

The government and the RBI had taken steps with the intention and expectation that these would bear fruit. ''Text book economics says that it will bear fruit.'' Union Minister of State for Industry Ashwani Kumar said in Jalandhar that due to stringent measures taken by the Union Government inflation would definitely come down within six to eight weeks from now.

''At present, top priority of the UPA Government is to control the escalated prices of the essential commodities,'' he said while talking to media persons.

Meanwhile, the Cement industry, facing charges of cartelisation, has borne a sharp rise of 42 per cent in its raw material cost in Q4 FY08, even as the wholesale prices of cement surged by 8.5 per cent during this period, a study said.

According to industry body Assocham, ''as the inflationary pressures across commodity segments have gripped the economy, cement seems to be one of the worst hit sectors as the seven prominent industry players have reported 42 per cent jump in the raw material cost against 25 per cent increase in sales in the last quarter of fiscal 08.'' The Assocham's Eco Pulse (AEP) study on 'Cost Escalation in cement industry' analysed that the key raw materials used in production of cement have recorded a huge rise in prices.

UNI/TEAM/MSJ VC1758