Driven by higher prices of fuel and manufactured goods,headline inflation for the month of June rose to 9.44 per cent as against 9.06 per cent during a month ago. The inflation figures,released today,sparked apprehensions that the Reserve Bank of India will continue with its tight monetary stance in its policy review later this month. The Wholesale Price Index (WPI) for June reflects the price hike in diesel,cooking gas and kerosene in May that was done to bail out state-owned oil companies suffering huge revenue losses. Diesel,cooking gas and kerosene comprise 6.4 per cent of the WPI basket and 70 per cent of the fuel component of the WPI. Stating that rising prices were a matter of concern,Finance Minister Pranab Mukherjee,said,The government is working together with the RBI to take appropriate steps to reduce inflation to more comfortable level. He attributed the increase in WPI inflation to increase in administered fuel prices,seasonal effects,an upward movement in mineral and manufactured prices and in part reflecting imported inflation. Food inflation for the week ended July 2,meanwhile,rose to 8.31 per cent as against 7.61 per cent during a week ago,due to rising prices of protein-based items,rice,wheat and vegetables. According to the data released by the government on Thursday,prices of vegetables rose by 5.53 per cent week-over-week,and that of rice rose by 1.02 per cent. Prices of egg,meat and fish increased by 1.82 per cent during the week. Annually,cereals became 5.40 per cent costlier,and vegetable prices were up by 2.25 per cent. Prices of onions shot up 30.72 per cent. Meanwhile,the revised figures for inflation in April saw a sharp upward increase from 8.66 per cent to 9.74 per cent,reflecting price rise in manufactured items. The inflation in manufactured items has doubled from 3.75 per cent in January to 7.43 per cent in June. Experts,however,feel that there is not much the government can do to contain prices as long as the volatility in global commodity markets continues.
