No warning from RBI over wage-push inflation crisis: FM

NEW DELHI: The Reserve Bank has not issued any warning that the constant rise in consumer prices will lead to higher wages and result in an inflation crisis, Parliament was informed today.

The Reserve Bank has not issued any warning over wage- push inflation crisis due to constant rise in consumer prices, Parliament was informed today.

"The RBI has not issued any warning that a payment-based inflation crisis could emerge in the country owing to constant rise in consumer prices," Finance Minister Pranab Mukherjee told the Rajya Sabha in a written reply.

There are apprehensions that rising food prices will lead to demand for more wages which in turn could further fuel inflation. This is called wage-push inflation crisis.

Inflation more than trebled to 4.78 per cent during November on account of rising prices of food items like potato, sugar and pulses.

Consumer price-based inflation indices are ruling much higher due to more weightage of food items .

To another query, Minister of State for Finance Namo Narain Meena said the wholesale price-based index because of its coverage, involving 435 commodities in its basket classified as primary articles (98 commodities), fuel, power, light and lubricants (19 commodities) and manufactured products (318 commodities), is the most preferred measure of inflation.