News: ‘India not in inflationary spiral’

(RTR 28/11/2006) New Delhi - India is not caught in an inflationary spiral despite a rise in prices since the middle of the year, a junior finance minister told parliament on Tuesday in a written reply to a question.

Wholesale price inflation was running at an annual rate of 5.3 percent in early November from under 5 percent in the middle of the year, official data showed .

"Government does not perceive any existence of inflationary spiral as the rate of inflation have not followed a unidirectional upward trend," Pawan Kumar Bansal said in his written reply.

Finance Minister Palaniappan Chidambaram, in a separate written reply to parliament, said rises in some food prices were mainly due to supply constraints, but added there were some favourable signs.

"While the rate of inflation for all commodities and foodgrains generally show a rising trend in the current year so far, the rate of inflation for vegetables and pulses have declined from their peak in August and September," he said.

To contain price rises, the government has cut import duty on wheat and allowed the import of essential commodities on easier terms, and also banned exports of some food items.