UPA govt losing sleep over rising inflation

OUT OF CONTROL: Inflation stood at 5.92 per cent in the week ending March 8.

    

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New Delhi: Inflation has hit the highest in the last 11 months and is now at nearly six per cent.

It stood at 5.92 per cent for the week ending March 8 and analysts blame the rise in prices of manufactured articles, which have been triggered, by high steel prices.

Food prices have also been going up since December 2007. And as a measure to combat price rise, the government says import duty cut on edible oil is likely.

For the government, rising inflation poses a major policy headache against the backdrop of slowing growth.

With the Lok Sabha polls round the corner, it wants to keep inflation below five per cent.

Union Finance Minister P Chidambaram has also said that controlling inflation is high on the government agenda.

"High inflation hurts the poor. Putting pressure on interest rates adversely affects both savings and investment. Thus, containment of inflation is high on government agenda," he said.

Even the people are now feeling the pinch as prices of vegetables have been rising for the past few days.

"The prices have increased too much. I get a salary of Rs 2,000 per month and earlier the price of potato was Rs 2 per kg but now it is Rs 20 per kg," a man buying vegetables says.

The shopkeepers also confirm that prices of vegetables have been on the upswing.

"I just got to know that the prices of tomato have risen to Rs 20 per kg. We are small shopkeepers and so cannot store large quantities. Now we will sell tomato at Rs 20 per kg," a vegetable vendor says.

However, gold prices, after rising for the last couple of months, are down.

Delhi has recorded almost a free-fall in prices and also the highest in the country. Prices in the capital dropped by over Rs 1,000 per 10 grams from its peak of over Rs 13,000.

Kolkata closely followed Delhi where the prices slipped to Rs 12,305 per 10 grams.

Prices in Mumbai settled at Rs 12,075 and in Chennai at Rs 12,175 per 10 gram respectively.

Traders say panic selling emerged after reports that the yellow metal had plunged to a one-month low globally.