Inflation at 3-yr high, FM says be patient

During the reporting week, prices of tea shot up by 17 per cent, even as other food items like milk, rice, vegetables and mutton became dearer.

Among other commodities, the prices of Light Diesel Oil and furnace oil went up by 2 per cent and by 1 per cent respectively.

In the manufactured products category cast iron pipes jumped by 51 per cent, pig iron by 8 per cent and steel sheets by 2 per cent.

The annual rate of inflation, based on Wholesale Price Index (WPI), has been rising despite fiscal and monetary measures taken by the government recently.

While the government has banned export of certain commodities like non-basmati rice and pulses and reduced customs duties on various other items to rein in inflation, the Reserve Bank of India (RBI) has raised the Cash Reserve Ratio (CRR) to suck excess liquidity from the market.

Be a little patient

Attempting to calm down concerns over rising inflation which touched a 42-month high of 7.57 per cent, Union Finance Minister P Chidambaram on Friday said inflation would be “tamed” and food prices are expected to come down “sooner” than other rates.

“Inflation is worrying us. It is at a three-year high,” he said on the sidelines of a function organised by the Federation of Karnataka Chambers of Commerce and Industry.

“Inflation will be tamed…contained. My only appeal to the people is to be patient and have faith. The current spurt is because of international developments,” he said.

There had been a very sharp rise in the prices of food, crude oil and commodities. “All these have come together at the same time unlike the other occasions, when the price of one was high the other had remained stable, he said.

“We are taking a number of measures. It will take some time to have some effect,” he said.

“Food prices will come down sooner than others,” he said adding that 154 lakh tonnes of wheat had been procured, surpassing the target of 150 lakh tonnes.

“We have also procured 230 lakh tonnes of rice, much higher than last year”, he said.

“We expect food prices to moderate”, he said.

The price of other manufacturing goods would also be contained, he said reiterating his appeal to people to be patient. “We are working at it. We understand their difficulty. But be a little patient”.