Click to play videoNew Delhi: There seems to be no respite from rising inflation. Data for the week ending March 29 show that inflation is at 7.41 per cent, which is the highest since November 8, 2004.
Last week inflation was seven per cent. The government has already abolished import duty on crude edible oils and banned export of non-basmati rice and pulses to control inflation.
It has also asked steel producers to rein in prices and the Reserve Bank of India (RBI) too is expected to announce measures to regulate money supply on April 29.
"We cannot react to such a situation by returning to an era of blind controls and by depressing agriculture's terms of trade that will hurt the welfare of our farmers as well as the long term growth of the economy as a whole," Prime Minister Manmohan Singh says.
The rise is spurred by an increase in iron and steel prices, which rose 5.6 per cent. Vegetable prices are also up 4.1 per cent. Both have combined and pushed inflation to the its highest level since November 8, 2004.
The government has reacted by clamping down on primary steel exports - they have been banned.
"To curb inflation government has banned export of rice, food articles, primary steel. Government is also withdrawing export incentives given to rice, cement and other primary steel items," Union Commerce Minister Kamal Nath said while announcing the government's new Trade Policy on Thursday.
The Communist Party of India National Secretary D Raja said he wants the Centre to interfere and not let market forces decide prices
"State governments have some role to play. Why the UPA government at Centre cut down supply to West Bengal and Kerela? It is of no use of blaming the state government. Macro level policies are decided by the Union Government. I want the government intervention in every sphere. It is not a sudden development. One should see in totality. If the government is aam aadmi government then it should have tackled the concerns of the aam aadmi," Raja said.
Manufacturing prices rose by 0.9 per cent while inflation for all commodities was up 0.5 per cent
There were expectations that inflation would settle at seven per cent on the back of measures taken by the government last week.
The Financial Year 2008 average inflation figure is at 4.51 per cent against 5.41 per cent a year ago.
Analysts are expecting the figures to rise in the coming weeks and foresee a hike in interest rates by the RBI in its monetary policy.
But there's some good news also as industrial growth for February is at 8.6 per cent, up from last month's 5.6 per cent. Analysts were expecting a growth rate of 7.2 per cent.
Manufacturing growth for February is lower at 8.6 per cent versus 12.0 per cent a year ago.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)
More on IBNLive Right Now
MOST SHARED
PHOTOGALLERY
