NEW DELHI, 12 April 2008 — Inflation woes seem to be only piling up for the government with consumer prices jumping to a 41-month high of 7.41 percent for the week ending on March 29.
With the Congress-led coalition concerned about securing vote of the common India in forthcoming parliamentary elections, the inflation is proving to be a major political headache for it. Prices of staples such as lentils, cereals and vegetables, as well as of steel and other metals have gone up.
The inflation figure is rated to be far above the market forecasts of 7.03 percent. It is the highest since November 2004.
The government has decided to end export incentives for cement and steel products to boost domestic supplies, Commerce Minister Kamal Nath announced yesterday. “We will take further steps to contain inflation,” Nath said. Conceding that soaring inflation was a worrying issue, Science and Technology Minister Kapil Sibal rated it as a global phenomenon, which could not be tackled immediately even though the government was taking all possible steps to contain inflation. “The government has no magic wand to bring down inflation, which is now a global phenomenon,” Sibal told media persons after a Cabinet meeting.
Prices of agricultural commodities have gone up by 73 percent in the international market, between August 2007 and March 2008, Sibal said, referring to World Bank figures. This included an 88-percent rise in prices of food products, followed by 74 percent rise in wheat prices, 72 percent in rice prices, 71 percent in fat and oil prices and 35 percent increase in sugar prices, Sibal said.