Year-on-year inflation, as measured by wholesale prices, rose to a 10-week high of 2.02 per cent for the week ending September 11, the Industry Ministry said on Sunday. The rate has now risen five weeks in a row.

Analysts said the trend would continue as a minimum rise of10 per cent in petroleum product prices was expected to be announced after a new government takes over after the current elections. "What we are looking at is basically cost-push inflation, driven by a rise in oil prices," said Pradeep Srivastava, chief economist at the National Council of Applied Economic Research.

The fuel group of products has a weighting of around 10.7 per cent in the wholesale price index. India fixes prices of key oil products to support across-subsidy scheme aimed at helping low income groups and peopleliving below the poverty line, who rely on products such as kerosene for cooking and lighting.

Prices for diesel, which accounts for 45 per cent of India's product consumption, were last hiked in March but are now below world prices. "I expect the annual inflation rate for 1999/2000 (April-March) to be around six per cent," Srivastava said.

Another economist said fiscal slippages would also put upward pressure on the inflation rate. "The government has lost control on spending, besides we had the Kargil and election expenses which were unexpected," said T K Bhaumik, senior adviser to the Confederation of Indian Industry. "At a conservative estimate, I see spending on Kargil and elections adding Rs 70 billion ($1.61 billion) to the bill."

India fought armed intruders on its side of the military control line in the Kargil region of Kashmir for 10 weeks in May-July before a withdrawal agreement with Pakistan. There have been no official estimates on the conflict's cost.

The country is currently goingthrough its third parliamentary election since 1996. The staggered polls kicked off on September 5 and are due to end on October 4.

Srivastava agreed that the Kargil conflict would add to government spending and said inflation would rise if this was financed through heavy borrowings. "Money supply growth has been running at 18-19 percent this fiscal (year) and this is a matter for concern," he said. "If the additional expenses are funded through primary money creation, this will push up inflation."

M R Madhavan, an analyst at ICICI Securities and Finance Co, said the key to future inflation trends would be the performance of the agriculture sector. "This year, the monsoon has been somewhat erratic and we have to see what impact that will have on food grains production and prices in turn," he said.

"Buffer stocks are good so the impact may not be too much." Analysts also said the "benign" effect of a high base last year, when inflation was several times current levels, would start wearing off fromNovember-December and this would also add to upward upward pressure on the inflation rate.