CorporateInflation trebles to 4.78%; RBI may squeeze money supply
Inflation more than trebled to 4.78 per cent during November on account of rising prices of food items like potato, sugar and pulses, and may prompt the Reserve Bank to squeeze money supply to tame price rise.
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The wholesale price-based inflation jumped to nearly 5 per cent from 1.34 per cent in October, according to the monthly inflation data released today.
Attributing rising prices to supply side constraints, Suresh Tendulkar, former chairman of the Prime Minister"s Economic Advisory Council (PMEAC), said the RBI could take steps to withdraw liquidity to tame rising prices. The apex bank is slated to announce review of its annual credit policy next month.
Food inflation, according the weekly data announced earlier, had shot up by 19.04 per cent during November recording the sharpest increase in the decade.
The monthly data, which was released by the government for the second time, shows that potato prices have surged by a whooping 141 per cent during the past eight months, followed by sugar 37 per cent, pulses 32 per cent and onion 20 per cent.
On the other hand, minerals, edible oils and leather products have become cheaper since March 2009.
The RBI in its monetary policy review in October has revised the inflation forecast to 6.5 per cent by March-end from 5 per cent earlier.