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Inflation climbs to 8.4 per cent in December

New Delhi: Inflation for December 2010 has risen to 8.43 per cent from 7.48 per cent in the previous month. Inflation was above 8 per cent in the months of August (8.51 per cent), September (8.62 per cent) and October (8.62 per cent) before falling to 7.48 per cent in November.

The December 2010 Wholesale Price Index primary articles inflation has climbed to 16.46 per cent vs 13 per cent while the month-on-month fuel group inflation is at 11.19 per cent against 10.32 per cent.

Inflation rose in December as prices of vegetables, particularly onion, and other protein-based items remained high.

With the inflation showing no signs of moderation, it is widely expected that the Reserve Bank of India will raise the key policy rates during its quarterly monetary policy review on January 25.

For October, the figure has been revised upwards to 9.12 per cent from the provisional number of 8.58 per cent.

It may be recalled, the food inflation, which accounts for over 14 per cent in the overall WPI inflation, has remained high through December and stood at 16.91 per cent.

However, prices of certain food items declined on an year-on-year. While wheat became cheaper by 5.09 per cent, pulses fell by 10.89 per cent and potatoes went down by 26.57 per cent.

During the month, fuel and power prices went up by 11.19 per cent, while manufactured goods became expensive by 4.46 per cent on an annual basis.

Manufactured items have the highest weight of 64.9 per cent in the wholesale price index, on the basis of which inflation is calculated.

Within manufactured products, however, sugar prices eased by 9.91 per cent and leather and leather goods by 1.23 per cent on an annual basis.

After two days of deliberations, the Government on Thursday finally came out with a plan to counter spiraling prices and said that stringent action would be taken against hoarders and black marketers.

A decision has also been taken to review the import and export of essential commodities regularly. The Government would also intensify the purchase of essential commodities.

A decision has been taken to ask the states to consider waiving octroi charges and local levies. But the states are likely to oppose the move.

A committee headed by Kaushik Basu will be set up to monitor inflation.

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