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Inflation soars to 7-year high

NEW DELHI: Inflation soared close to its seven-year high at 8.75 per cent for the week ended May 31, mainly owing to the continuing spurt in the prices of food articles and vegetables. This has led to apprehensions that the cascading effect of the fuel price hike could well push it to double digits in weeks.

With the WPI-based inflation rate surging from 8.24 per cent a week ago to the highest point in the UPA regime’s tenure at the Centre, the Left parties launched an attack on the government for its “slack attitude” to holding the price line and called for a paradigm shift in policies.

To curb the consumption of high-cost fuels, the government on Friday announced a steep hike in excise by way of an additional duty of Rs. 15,000-20,000 on fuel guzzlers such as large engine capacity cars, multiutility vehicles and sports utility vehicles.

To make more steel available in the domestic market by way of higher production and thereby stem its rising prices, the government slapped an ad valorem duty on iron ore exports and hiked the export duty on long steel products.

While inflation peaked to 8.77% in February 2001, the previous high for the UPA government was 8.33 per cent as per the provisional data for the week ended August 28, 2004.

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