UPA gets the jitters as inflation races to 6.73%
Inflation rose to 6.73% for the week ended February 3 compared to 6.58% in the previous week.
By TNN |
NEW DELHI: The heat is on. Inflation rose to 6.73% for the week ended February 3 compared to 6.58% in the previous week. To make matters worse for the UPA government and its leadership, the consensus among economists ET spoke to was that the inflation rate is likely to remain high into April. Finance minister P Chidambaram, however, said the fuel price cut-Rs 2/litre on petrol and Re 1/litre on diesel-effected on Thursday will help contain inflation.
The inflation experienced by primary articles and manufactured products stood at 12.3% and 6.4%, respectively, for the week ended February 3, according to government data released on Thursday.
Consumers are feeling the pinch due to rising prices of primary food products like vegetables, pulses and oilseeds. The year-on-year inflation rate for the three commodities stood at 29%, 24% and 27%, respectively. In the manufactured products category, prices of steel and cement jumped 15% and 16%, respectively. The UPA government is worried about the impact of inflation on elections going on in Punjab, Uttarakhand and Manipur as well as the April elections in UP.
The inflation rate, which indicates the general price levels of goods and services in the economy, stood at 3.98% in the corresponding last year. “The chunk of this week’s inflation has come from pulses, which shows over a 24% inflation rate,” said Saumitra Chaudhary, office member of the PM’s Economic Advisory Council.
“There could even be an inflation overhang in the first quarter of next year,” said Mr Chaudhary. Crisil chief economist DK Joshi said inflation will be high till March.
The inflation experienced by primary articles and manufactured products stood at 12.3% and 6.4%, respectively, for the week ended February 3, according to government data released on Thursday.
Consumers are feeling the pinch due to rising prices of primary food products like vegetables, pulses and oilseeds. The year-on-year inflation rate for the three commodities stood at 29%, 24% and 27%, respectively. In the manufactured products category, prices of steel and cement jumped 15% and 16%, respectively. The UPA government is worried about the impact of inflation on elections going on in Punjab, Uttarakhand and Manipur as well as the April elections in UP.
The inflation rate, which indicates the general price levels of goods and services in the economy, stood at 3.98% in the corresponding last year. “The chunk of this week’s inflation has come from pulses, which shows over a 24% inflation rate,” said Saumitra Chaudhary, office member of the PM’s Economic Advisory Council.
“There could even be an inflation overhang in the first quarter of next year,” said Mr Chaudhary. Crisil chief economist DK Joshi said inflation will be high till March.
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