Last Updated: 2010-10-11T15:45:58+05:30

The government of India has announced to release its September headline inflation data on Friday, a trade and industry ministry spokesman said. The release of data is postponed in the wake of closing ceremony of the Commonwealth Games, the spokesman told the media. The CWG Games end on October 14, 2010. The data would be released around 0630 GMT on Friday, said an official. The wholesale price index data is usually released on the 14th day of each month or the next working day, if it falls on weekend or a public holiday. According to August data, India's headline inflation stood at 8.5%. But, the RBI had it to 6% for the period ending March. The RBI is expected to meet on November 2, 2010 for the next policy review.

Inflation Falls At 8.51% In August

Last Updated: 2010-09-14T14:08:43+05:30

Inflation for August fell at 8.51 percent, an official data released today shows. The inflation for August was as per the new the Wholesale Price Inflation (WPI) series. "It (the new index) will help in informing both the government and people how the prices are moving. This will give a robust picture and reflect actual price movement," Commerce Minister Anand Sharma said in a statement. But according to the old series of WPI inflation, which is based on 1993-94, the inflation stands at 9.5 percent in August, the Commerce Ministry says. The new series of Wholesale Price Index is based on 2004-05. And the overall inflation in August fell by 1.27 percent from 9.78 percent in July. The new series of WPI with different components in it is expected to bring down the inflation further. Sharma also pointed that food inflation is still a cause of concern. Besides, Finance Minister Pranab Mukherjee also said that inflationary pressure on food prices is a concern. "Inflationary pressure is still there because food prices have gone up because of the erratic monsoon and certain other things," Mukherjee said. However, he said that Reserve Bank and the Ministry of Finance would take required measures to contain inflation. "The RBI is constantly watching the situation. We are in touch with the RBI. The RBI and the Ministry of Finance will take appropriate measure at the appropriate time," he added.

Government Endeavouring To Control High Inflation: Manmohan Singh

Last Updated: 2010-08-16T13:03:12+05:30

Prime Minister Manmohan Singh said yesterday the government is making all the efforts to bring the high inflation under control. I would certainly like to say that we are making every possible effort to tackle this problem. I am also confident that we will succeed in these efforts," Singh said in a statement. Prime Minister, during the 64th Independence Day speech at Red Fort on 15 August, said that the government was trying to control inflation and relieve poor from its effect. Singh noted that the poor were the worst affected because of the rising prices. "I know that in the last few months high inflation has caused you difficulties. It is the poor who are the worst affected by rising prices, especially when the prices of commodities of everyday use like food grains, pulses, vegetables increase, he added. "It is for this reason that we have endeavoured to minimise the burden of increased prices on the poor," Singh added. Singh also said that that we need to work harder in order to increase the agricultural growth rate to 4 percent a year.

RBI Likely To Increase Key Policy Rates

Last Updated: 2010-07-27T09:18:01+05:30

The apex bank, the Reserve Bank of India, is likely to increase the key policy rates tomorrow reports said on Monday. Rates are likely to be increased by at least 25 basis points in the first quarterly review of the monetary policy, "I think there could be a small hike in the repo and reverse repo rate of say 25 basis points," HDFC Managing Director Renu Sud Karnad was quoted as saying. Because of the increase in the level of inflation, RBI is likely to increase the key rates in order to suck out the excess money. "There is a clear bias for policy rates to move up for the reason that inflation is still very high and inflationary expectation is to be contained. The bias is going to be upward," Union Bank of India Chairman M V Nair said in a statement.

INDIA INFLATION RATE

The inflation rate in India was last reported at 11.25 percent in July of 2010. From 1969 until 2010, the average inflation

rate in India was 7.99 percent reaching an historical high of 34.68 percent in September of 1974 and a record low of 11.31 percent in May of 1976. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: India Inflation Rate chart, historical data and news.

Country India

Interest Rate 5.00%

Growth Rate 8.80%

Inflation Rate 11.25%

Jobless Rate 8.00%

Current Account -13

Exchange Rate 45.0150

January 2008
to

October

2010

UPDATE DATES

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Year 2010 2009 2008

Jan 16.22 10.45 5.51

Feb 14.86 9.63 5.47

Mar 14.86 8.03 7.87

Apr 13.33 8.70 7.81

May 13.91 8.63 7.75

Jun 13.73 9.29 7.69

Jul 11.25 11.89 8.33

Aug

Sep

Oct

Nov

Dec

11.72 9.02

11.64 9.77

11.49 10.45

13.51 10.45

14.97 9.70

* The table above displays the monthly average.

INDIAN INFLATION
On March 19, 2010, the Reserve Bank of India raised its benchmark reverse repurchase rate

to 3.5% percent, after this rate touched record lows of 3.25%. The repurchase rate was raised to 5% from 4.75% as well, in an attempt to curb Indian inflation.

Indias 2009-10 Economic Survey Report suggests a high double-digit increase in food inflation, with signs of inflation spreading to various other sectors as well. The Deputy Governor of the Reserve Bank of India, however, expressed his optimism in March 2010 about an imminent easing of Indian wholesale price index-based inflation, on the back of falling oil and food prices. For 2009, Indian inflation stood at 11.49% Y-o-Y. This rate reflects the general increase in prices, taking into account the purchasing power of the common man. According to the Economic Survey Report for 2009-10, economic growth decelerated to 6.7% in 2008-09, from 9% in 2007-08. The economy is expected to grow by 8.7% in 2010-11, with a return to a growth rate of 9% in 2011-12.

The Indian method for calculating inflation, the Wholesale Price Index, is different from the rest of world. Each week, the wholesale price of a set of 435 goods is calculated by the Indian government. Since these are wholesale prices, the actual prices paid by consumers are far higher.

In times of rising inflation, this also means that the cost of living increases are much higher for the populace. Cooking gas prices, for example, have increased by around 20% in 2008. With most of Indias vast population living close to or below the poverty line, inflation acts as a Poor Mans Tax. This effect is amplified when food prices rise, since food represents more than half of the expenditure of this group. The dramatic increase in inflation will have both economic and political implications for the government, with an election due within the year.

Economic growth in emerging markets has slowed but is far from over. With the BRIC countries (Brazil, Russia, India and China) alone accounting for more than 3 billion people, and with these people consuming more resources every year, it is likely that higher inflation rates will be with us for a good while yet - and that is worrying news for the government of India.