NEW DELHI: Driven by rising prices of fruits, milk, petrol and manufactured goods, headline inflation surged past the 9 per cent mark in May, raising the expectations of another hike in key policy rates by the Reserve Bank of India later this week.
Inflation rose to 9.06 per cent in May from 8.66 per cent in April, prompting Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan to describe the trend as "upsetting" and pitch for tightening of the monetary policy by the RBI to cool rising prices.
The central bank, which has raised key interest rates nine times since March, 2010, to check rising prices, is slated to conduct a mid-quarterly review of the monetary policy on Thursday. The RBI would try to balance the need to tame inflation and promote industrial growth, which has slipped to 6.3 per cent in April from 13.1 per cent a year ago.
"I think the inflation numbers are in a sense upsetting... We need to address the issue of inflation even more strongly. We need to use more monetary and fiscal policy to contain inflation," C Rangarajan told reporters here.
According to Wholesale Price Index (WPI) data released by the government today, several essential items, including rice, fruits, petrol, edible oils, cotton textiles and iron and steel products, became more expensive during May in comparison to April.
Inflation, according to Planning Commission Deputy Chairman Montek Singh Ahluwalia, "is a problem (but) we still remain hopeful... It has gone up, which is not unexpected, because the preliminary indications said it would go up."
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Inflation rose to 9.06 per cent in May from 8.66 per cent in April, prompting Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan to describe the trend as "upsetting" and pitch for tightening of the monetary policy by the RBI to cool rising prices.
The central bank, which has raised key interest rates nine times since March, 2010, to check rising prices, is slated to conduct a mid-quarterly review of the monetary policy on Thursday. The RBI would try to balance the need to tame inflation and promote industrial growth, which has slipped to 6.3 per cent in April from 13.1 per cent a year ago.
"I think the inflation numbers are in a sense upsetting... We need to address the issue of inflation even more strongly. We need to use more monetary and fiscal policy to contain inflation," C Rangarajan told reporters here.
According to Wholesale Price Index (WPI) data released by the government today, several essential items, including rice, fruits, petrol, edible oils, cotton textiles and iron and steel products, became more expensive during May in comparison to April.
Inflation, according to Planning Commission Deputy Chairman Montek Singh Ahluwalia, "is a problem (but) we still remain hopeful... It has gone up, which is not unexpected, because the preliminary indications said it would go up."
toi
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