India's inflation rate rises, industrial growth plummets

US-IndiaNew Delhi - India's inflation rate rose to 11.89 per cent as its industrial growth fell sharply, official data showed Friday, raising fresh concerns for the government that is already in a bind over a nuclear deal with US.

The annualized inflation rate, which has been linked to India's wholesale price index, moved up by 0.26 per cent from 11.63 per cent in the previous week.

Higher prices of essential food items and manufactured products have triggered soaring rates of inflation in the past few months.

Inflation was only 4.42 per cent in the corresponding week a year ago and is now at a 13-year high since such inflation figures were last recorded in May, 1995.

Meanwhile, India's index for industrial growth plunged to 3.8 per cent in May compared to 10.6 per cent a year ago, due to a poor performance of the manufacturing and electricity sector.

Industrial output, which is measured by the Index of Industrial Production (IIP), grew by just five per cent over April and May as compared to 10.9 per cent during the same period last year.

The record double-digit inflation and falling industrial growth rates have added to the woes of the United Progressive Alliance whose survival has been threatened after left-wing parties withdrew political support this week in protest over the civilian nuclear deal with US.

Prime Minister Manmohan Singh has said he will seek a confidence vote in the parliament after the UPA was reduced to a minority government.

Senior cabinet ministers were scheduled to hold a meeting later on Friday to decide the date of the trust vote, which is likely on July 21 or July 22. (dpa)

Regions: