Inflation rises to 8.31%

Inflation rises to 8.31%

However, Finance Minister Pranab Mukherjee expressed hope that inflation should come down to 7 per cent by next month-end.

“By March-end, it would be possible to have around 7-7.5 per cent (inflation),” Mukherjee told reporters in the Parliament House complex. Monthly fluctuations in inflation do not give a correct picture, he added.

The inflation rate stood at 8.23 per cent in January this year, whereas it was 9.42 per cent in February last year. During February, food inflation, which accounts for over 14 per cent of overall wholesale price index (WPI) inflation, stood at 10.65 per cent on year-on-year basis.

As per WPI data, the prices of primary articles — food, non-food articles and minerals — shot up by 14.79 per cent on an annual basis.

With inflation showing no signs of moderation, it is widely expected that RBI may raise key policy rates by 25 basis points at its monetary policy review on March 17.

Meanwhile, WPI numbers were revised upward to 9.41 per cent for month of December, compared to a provisional 8.43 per cent announced earlier.

Tightening of monetary policy will harden the overall interest regime, which will make all sorts of borrowing including housing, car and personal loan more expensive.