Times of India
New Delhi, Apr 12: Surging prices of vegetable, fruits and pulses hit the common man hard while dearer steel and metals pushed the inflation to a 40-month high of 7.41%, prompting the government to take more price control measures like ban on cement exports.
The common man was affected most by the surging prices of vegetables that showed an increase of 4.1% during the week, while spices and pluses became dearer by 1.2% and 1.8% respectively in the wholesale market. Price rise in these commodities would be much higher in the retail market going by the traditional difference in WPI and Consumer Price Index.
Steel prices surged by 5.6% during the week even as government said that it could consider banning the metal next week, while hoping that ban on edible oils, rice and pulses taken earlier this month would start yielding results and improve availability to provide relief to consumers.
Coinciding with the slowing down in industrial growth to 8.6% in February, 2008, the inflation cast a shadow on the foreign trade policy announced by the government wherein commerce minister Kamal Nath said that domestic availability of goods would get top priority.
Analysts and bankers say that the high rate in price rise could have a reflection on the upcoming monetary policy, to be announced by the Reserve Bank of India on April 29.
Commenting on the inflation data released on Friday, Kapil Sibal, science and technology minister, told reporters that the issue was discussed in the cabinet meeting, but added: “The government has no magic wand to bring down inflation which is now a global phenomenon. Due to rise in prices worldwide, it has become rather an import inflation,” minister of earth, science and technology Kapil Sibal told reporters while briefing the mediapersons after the cabinet meeting.
Referring to World Bank figures, Sibal said prices of agricultural commodities have gone up by 73% in the international market during the period between August 2007 and March 2008. It included 88% rise in prices of food products, followed by 74% rise in wheat prices, 72% in rice prices, 71% in fat and oil prices and 35% increase in sugar prices, he said.
Elaborating on the measures taken by the government to contain inflation, Sibal said state governments have been asked to put limits on stocks of foodgrain.
Ruling out an increase subsidies, he said efforts were being made to contain prices through duty cuts and other measures. The poor people were supported through public distribution system, he added. Prices of edible oils have already come down after duty cut and it may take some more time for this to happen in case of other commodities. Sibal said the issue was taken up in the cabinet meeting, adding that “We are ready to take, if required, further steps to contain inflation”.
On the impact of inflation on coming elections, he said: “Whenever there are elections we will come to know. But we want to convey the message to people that inflation is a global phenomenon and that the government is taking all possible steps to limit its impact on India.”
When asked about the impact of the recommendations of the Sixth Pay Commission and higher budgetary allocations due to rise in inflation, the minister said: “There is no impact so far”.
The PM had on Thursday admitted that surging food prices were making it difficult to manage inflation, but ruled out any “blind controls”. AGENCIES
HOW THEY FARE
China 8.7%
Russia 11.9%
Argentina 7.3%
Turkey 8.1%