By- Correspondent | Date- July 15, 2011
The issue of inflation continues to haunt Indian economy more and more. In spite of tall claims by the Government, the inflation based on Wholesale Price Index (WPI) for the month of June, 2011 accelerated to 9.44%. It increased from 9.06% observed in the previous month.
Government data showed that the annual rate of inflation was 10.25% during the corresponding month of the previous year. Build up inflation in the financial year so far was 2.34% as compared to a buildup of 2.57% in the corresponding period of the previous year.
Worst hit was the index for Minerals which rose by 17.2% due to higher prices of crude petroleum (34%), magnetite (9%), steatite (7%), barytes and chromite (5% each), copper ore (3%) and iron ore (2%).
The index for Food Articles rose by 1.9% due to increasing prices of tea (13%), milk (6%), coffee, eggs and marine fish (5% each), grams (4%), pork, fish-inland and mutton (2% each).
The good side was however, that the index for Non Food Articles group dropped by 1.7% from the previous month due to decreased prices of timber (21%), raw cotton and jute (8% each) and raw silk (6%).
It is to be noted that The Reserve Bank of India (RBI) has increased key policy rates as many as 10 times in last one and a half year to tame inflation.. The policy rates, the repo rate (the lending rate) and the reverse repo rate (the borrowing rate) was continuously increased. However inflation figures continue to mock all projections and claims of the Reserve Bank of India and the Government that controlling inflation was their first priority and that the increase in interest rates would bring down inflation in the country. However, it is once again being expected that now the RBI would be all set to increase rate once again.