Expensive food items increase the inflation rates

Inflation according to the wholesale price index (WPI) has increased to 8.43% last month as against 7.48% of November due to a sudden spurt in the costs of fruits, vegetables and spices.

The resumed rise in headline inflation made the economists foretell that the Reserve Bank of India (RBI) will increase its interest rates by around 50 basis points at the time it shows its quarterly monetary policy review on 25th January.

According to the Finance Minister Pranab Mukherjee, restraining inflation is a tough thing to do and the RBI must take proper action according to the requirement and when it is needed.

He has further said at a news conference on Friday that every time a proper and required adjustment of the vital rates is called for in the bigger interest of the economy, even for the price stabilisation, the RBI conducts a proper policy after having talked and consulted with the government.

With the increased inflation going on around the expected lines because of the persistent high food costs, the economists are worried that the upward revision in the amount of inflation for the month of October from 8.6% to 9.1% estimated earlier.

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