Your worst fears have just come true. The government is unabale to control rising prices.
Inflation rose to a 45-month high of 8.1 per cent for the week ended May 17 on account of rising prices of fruits and vegetables, pulses, spices and some industrial fuels.
"Inflation at 8.1 per cent is worrisome. We will do our best to contain, moderate and reverse headline inflation," said Finance Minister P Chidambaram on Friday.
He warned that any rise in administered prices of petrol will be inflationary in the short term. He also said that there was still some scope for cement manufacturers to cut prices.
The Wholesale Price Index-based inflation was 7.82 per cent a week ago and 5.3 per cent during the corresponding week last year. During the week, prices of fish marine jumped up by 6 per cent, fruits and vegetables by 3 per cent, moong 2 per cent and spices by 1 per cent.
Among the industrial fuel, furnace oil became expensive by 3 per cent, light diesel oil 2 per cent and coke 31 per cent. Despite the ban imposed by the government on export of skimmed milk powder, it became costlier by 7 per cent. At the same time prices of imported edible oil and khandsari went up by 1 per cent. However, cement prices came down by 0.6 per cent, while iron and steel prices declined by 0.6 per cent.
The previous high, as per the provisional figures for inflation, was recorded at 8.33 per cent for the week ended August 28, 2004. For the record, the government will hike prices of petrol, diesel and cooking gas on Saturday, May 31. With fuel prices rising, prices of all commodities will rise too.
So what causes inflationary pressures? Read on. . .
Compiled by Rediff Business Desk
Image: A child takes part in a demonstration by the Communist Party of India (Marxist) against a fuel price hike in New Delhi recently. | Photograph: Manpreet Romana/AFP/Getty Images
Also read: What you must know about inflation