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Inflation up at 7.52 percent in November
Monday December 16, 2013 9:55 PM, IANS

India's headline inflation based on wholesale prices rose to 7.52 percent in November due to high fuel and food prices, government data showed Monday.

The country's main inflation measure based on the wholesale price index (WPI) was at seven percent in the previous month and 7.24 percent in the corresponding month of last year, according to data released by the ministry of commerce and industry here.

Food prices jumped by 19.93 percent year-on-year during the month under review. They increased by 18.19 percent in October.

Prices of vegetables jumped by 95.25 percent in November year-on-year. Onion prices soared by 190.34 percent. Potatoes were costlier by 26.71 percent. Fruits became dearer by 13.73 percent and prices of eggs, meat and fish rose by 15.19 percent year-on-year during the month under review.

Cereal prices were up 11.32 percent year-on-year. Rice was costlier by 14.99 percent. Wheat was expensive by 7.21 percent.

Fuel and power inflation rose to 11.08 percent in November as compared to 10.33 percent in October and 9.97 percent in the corresponding month of last year.

The prices of liquefied petroleum gas (LPG) grew by 10.90 percent, petrol became dearer by 4.42 percent and diesel costlier by 15.65 percent.

Manufactured products' inflation rose to 2.64 percent in the month under review from 2.5 percent in October. In the corresponding period last year, it stood at 5.41 percent.

The build-up inflation rate in the financial year so far was 6.70 percent as compared to 4.84 percent in the corresponding period of the previous year.

The rising inflation has sends ripples across the various sectors and the industry stakeholders feel it is critical for the country to resolve the supply-side issues.

"Prices of vegetables remain unduly high and it is critical for India to implement measures to resolve supply side issues in this area. Several recommendations have been provided FICCI," Naina Lal Kidwai, president, Federation of Indian Chambers of Commerce and Industry (FICCI) said.

"With the mid-quarter monetary policy review due shortly, we hope RBI (Reserve Bank of India) will take due cognizance of the fact that growth is still feeble and needs support.IIP data released last week indicated negative growth in October 2013. The demand situation has not yet improved, which is reflected in the de-growth in the consumer durables segment," she added.

Increase in WPI before the credit policy review by the RBI is certainly a big dampener for India's macro picture, marked by rising prices, high interest rates and low growth in industry and services, D.S. Rawat, secretary general, Associated Chambers of Commerce and Industry of India (Assocham) said.

On Thursday, the country's retail inflation measured in the consumer price index (CPI) for November rose to 11.24 percent as compared to 10.17 percent in the previous month.

India's retail inflation rose on the back of high food prices. The prices of vegetables were up by 61.60 percent, fruit prices were up 15 percent, cereals and products went up by 12.07 percent and egg, fish and meat rose by 11.96 percent.

Prices of food and beverages were up by 14.72 percent, the data showed.

The country's industrial output has contracted by 1.8 percent during October - from a year-on-year growth of 8.4 percent in the corresponding month of last year - due to poor performance of the mining and manufacturing sectors.

The disappointing WPI data will bear heavy on the RBI'S agenda on Dec 18, 2013, when it meets to review the quarterly financial policy of the country.

High retail and wholesale price inflation is expected to put pressure on RBI not to ease the monetary policy as RBI's Governor Raghuram Rajan has said that though economy is weaker, but inflation is also higher than what the central bank is comfortable with.

Even, the major Indian equities indices bore the brunt of the inflation data which dashed any hopes of the apex bank easing on monetary policy. The RBI has raised interest rates by a quarter percentage point in each of its previous two reviews.

The 30-scrip S&P Sensex of the Bombay Stock Exchange (BSE), which opened at 20,714.26 points, closed at 20,659.52 points - down 56.06 points or 0.27 percent from its previous day's close at 20,715.58 points.

The benchmark touched a high of 20,764.52 intra-day and a low of 20,637.77 points.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) closed flat. It ended in negative territory, down 13.70 points or 0.22 percent at 6,237.05 points.

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