May 14: Inflation rises to 7.23% in April

A shopkeeper (R) and a worker sit beside sacks of rice inside a wholesale shop in Siliguri

Inflation moved up to 7.23% in April on account of spurt in prices of vegetables, meat, milk and pulses, although onion and fruits showed a declining trend. Inflation, as measured by the Wholesale Price Index (WPI), was 6.89% in March. In April last year, it was 9.74%

Since January, RBI has resorted to injecting liquidity into the financial system, by reducing Cash Reserve Ratio for banks. Besides, it has called for fiscal steps by the government to combat inflation. However, in its annual monetary policy last month, RBI cut key lending rate by 50 basis points to lower borrowing costs amid falling industrial and economic growth

RBI has projected inflation to be around 6.5% by March 2013, with a caution that it will remain sticky and there is need to arrest the decline in economic growth

(Pictures by Reuters)