India inflation hits 42-month high of 7.57 pct

Officials from the CA Sri Lanka overseas chapters

NEW DELHI, May 2, 2008 (AFP) – India’s inflation rate accelerated to a 42-month peak of 7.57 percent, driven by higher food costs, according to official data on Friday, dealing a fresh blow to the government. Annual inflation quickened more than two-tenths of a percentage point to touch 7.57 percent for the week ended April 19, up from 7.33 percent a week earlier.

The prices of rice, milk, tea, and vegetables all rose as did some manufactured goods such as steel sheets used in construction.

High inflation has become a top political issue in India with taming prices the key goal of the Congress-led government, which faces general elections within a year and a clutch of state polls before then.
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India’s hundreds of millions of poor — whose support is vital at voting time — have been hit hardest by the inflation surge.

The latest rise was reported after India tightened monetary policy for the second time in two weeks on Tuesday and announced a slew of fiscal steps to boost food and metal supplies as it struggles to ease runaway costs.

Inflation in Asia’s third-largest economy last hovered around these levels in late 2004 when the central bank embarked on an aggressive monetary tightenin

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