The Hindu Business Line : Milk, cereal prices push inflation up further

New Delhi, June 6 Inflation continued its northward trend to inch up further above 8 per cent, spurred on by increasing prices of primary articles including cereals, spices, milk and fruits, besides manufactured items such as iron and steel and edible oils.

The latest Wholesale Price Index-based inflation estimate of 8.24 per cent for the week ending May 24, as against the previous week’s annual rise of 8.10 per cent, does not, however, incorporate the hikes in fuel prices announced by the Government on Wednesday.

The impact of the diesel, LPG and petrol price hike is slated to figure two weeks from now, when the data for the week ending June 7 would be released.

Reacting to the latest inflation numbers, the Finance Minister, Mr P. Chidambaram, said the Centre would take more steps to cool the rate of price rise.

More steps

“We have taken fiscal, monetary and administrative measures and we are willing to take more measures,” he said in a statement. The RBI Governor, Mr Y.V. Reddy, had on Thursday said the central bank was ready to employ the full range of instruments at its disposal to turn round inflation.

The latest inflation estimate is the highest since the week ended August 28, 2004. According to the data released by the Ministry of Commerce and Industry on Friday, inflation in the primary articles group rose to 9.28 per cent, from 8.86 per cent in the week ended May 17, with cereals (7 per cent), fruits (8 per cent), milk (8 per cent) and spices (11 per cent) showing spurt in price levels.

Inflation in primary articles has gone up by 554 basis points since December 2007.

Inflation in manufactured products also rose further to 7.95 per cent, from 7.84 per cent in the previous reported week, with dairy products up 11 per cent, edible oils up 12 per cent and iron and steel prices rising 31 per cent on a year-on-year basis. Inflation in the manufactured products has risen by 393 basis points since December 2007 and the current inflation is ruling at a 199-week high.