Inflation hits to 3 1/2 year high of 7.83% in India

Inflation rose to near 44-month high of 7.83 per cent for the week ended May 3, against 7.61 per cent in the previous week, mainly on account of rising prices of essential food items and some manufactured products.

Inflation was last above this level at 7.87 per cent on September 11, 2004 as per provisional figures and 7.86 per cent for the week ended September 18, 2004, according to final figures.The WPI based index inflation stood at 5.74 per cent in the corresponding week a year ago.

During the week, prices of food articles like fruits and vegetables, spices, coffee, masoor rose, compounding worries of the government and RBI amid a slowdown in industrial growth. Among food articles, fruits and vegetables went up by 3 per cent, coffee 6 per cent, maize 4 per cent, spices and masoor by 1 per cent each. Even in manufactured category, prices of food articles like atta, coconut oil and khandsari went up.

However, prices of cement, iron and steel declined, giving some respite to the government. Prices of some industrial fuels like naphtha, furnace oil and light diesel oil also shot up.

Today’s inflation rate may be revised in two months when India‘s government reviews the figures after receiving additional price data. The Commerce Ministry today increased the inflation rate for the week ended March 8 to 7.78 percent from 5.92 percent.