New Delhi, July 14: Inflation, a measure of rising cost rose to 10.55 per cent in June on the back of rising fuel prices.
A high inflation and the government’s inability to control it has now turned into a major political issue. The Bharat Bandh sponsored by the opposition parties in the first week of July has brought the issue of high prices to centre stage according to sources. High inflation is a surefire sign that RBI will once again hike interest rates on July 27.
The finance minister, Mr Pranab Mukherjee, said on Wednesday that prices would moderate by the end of the kharif season, and inflation would come down to 5-6 per cent by the year-end. “It is 10.55 per cent. It is hovering around double digits. After the kharif season is over, there will be a moderating impact which is already being felt. I do feel that the annual rate of inflation will be 5-6 per cent by 2010-end,” he said.
Inflation was at 10.16 per cent in May. The April data was also revised from the earlier 9.6 per cent to 11.2 per cent just as the March inflation data was revised upwards last month.
The Planning Commi-ssion deputy chairman, Dr Montek Singh Ahluwalia, said that fuel price hike will further increase inflation in July, but it will fall below double digits by the end of December. “I think altho-ugh there will be an adjustment upwards (in inflation) when the fuel price hike gets fed into the July numbers, I don’t alter my conclusion that by December it will be low,” he said.