Inflation spirals to 7-yr high at 8.75 pc

New Delhi, Jun 13 (UNI) The headline inflation rate for the week ended May 31 soared to a seven-year high of 8.75 per cent as compared to 8.24 per cent in the previous week, attributed by the Centre mainly to the unprecedented rise in crude oil prices and food items in the global market.

Seeking to allay misgivings at the spiralling inflation, Finance Minister P Chidambaram attributed the high inflation rate to global factors that were beyond the control of the Union government.

''This will pass on. People should not be overwhelmed by the present difficulties,'' he said while speaking at a function at Madras Christian College Higher Secondary School in Chennai.

''Unprecedented rise in crude oil prices and food items in the global market are the main cause for the present difficulties'', he added.

The annual inflation rate was 5.09 per cent during the corresponding week of the previous year, the Wholesale Price Index (WPI) data showed here.

Inflation for the week ended April 5 was revised to 7.71 per cent from 7.14 per cent.

Congress president Sonia Gandhi claimed despite the crude oil prices crossing over USD 130 per barrel, the Centre was absorbing the major part of it, keeping the petrol prices lower than other countries.

''The Opposition has been blaming us but it has become impossible for the government to reduce the prices. We have tried our best not to push the entire burden on the consumers with the government taking majority of it,'' Ms Gandhi told reporters in Guwahati where she had gone on a day-long visit to address a farmer's rally organised by the Assam Congress unit.

Admitting that the spiralling inflation was a major concern, the Congress said the prices of foodgrains, however, should not be brought down at the cost of farmers.

The party would like the government to do ''tight-rope walking'' and strike a balance between retail prices for the consumer and remunerative prices for the farmers, AICC spokesman Shakeel Ahmed told reporters.

The Congress was in favour of raising the minimum support price (MSP) for paddy to Rs 1,000 a quintal, he said, expressing satisfaction over the government announcement on an ad hoc hike of Rs 105 to take the MSP to Rs 850.

Defending the government's anti-inflationary measures, he said inflation had stayed above 8.8 per cent for 21 weeks in 2001-02 when the NDA was in power.

The BJP alleged Prime Minister Manmohan Singh was taking the country towards a double-digit inflation once again.

More UNI Team HS BD1900