Fuel price hike to raise inflation

Written by Press Trust of India | New Delhi | Updated: Jun 30 2010, 06:23am hrs
The hike in fuel prices will further stoke inflation and prompt the government and RBI to take strong measures to ease pressure on prices soon, said the countrys chief statistician Pronab Sen. You (are) already in inflationary process. The non-food inflation is accelerating. In that situation, this (fuel price hike) can actually trigger off stronger inflation process, he told reporters on the sidelines of a function to mark Statistics Day.

Noting that neither the finance ministry nor RBI has taken any strong anti-inflationary measure, Sen said, sooner or later they are going to come. On the possibility of RBI taking steps to tighten monetary supply before its scheduled policy review on July 27, Sen said, that is up to RBI. Sen, however, pointed out that the need for a huge sum of money by telecos for mobile spectrum has sucked out liquidity to a large extent from the system. Spectrum sale ...(has) sucked out huge liquidity, equivalent to 50 basis points increase in CRR (Cash Reserve Ratio), he added.