Inflation hits 9-month high at 5.11%
WHOLESALE price-based inflation rose to a nine-month high of 5.11% for the week ended March 1, compared to the previous week’s 5.02%. The increase was on account of a rise in the prices of nonfood articles such as raw rubber, cotton, mustard seed and some manufactured products such as edible oil, ghee, groundnut oil and aviation turbine fuel (ATF). Attributing the rise in inflation to the increase in prices of imported commodities, finance minister P Chidambaram said the government is ready to take fiscal measures to control it while trying to make the country self-sufficient in key items. Speaking in the Lok Sabha, he also expressed hope the new WPI index, which is being formulated, will take into account the current baskets of goods and services to reflect inflation more accurately. This is the second week in a row when the inflation rate crossed the 5%, the target set by RBI for this fiscal. Inflation was at 6.51% in the corresponding period last year. Experts feel inflation has become a cost-push rather than demandpull phenomenon.