Will Inflation touch 14-14.5 pc in December 2008?

It's all about the inflation. India is reeling under the pressure of high inflation rate, which has touched the double digit mark. Fiscal measures from the RBI have failed to check the inflation. The rise in crude price at the global market is the one of the reasons for high inflation rate in India. Considering the high crude price and loss to the oil corporations, the government of India has hiked the prices of petrol, diesel and LPG recently, which reportedly sparked the inflation further. This hike has affected the budget of the people. Inflation is a sensitive issue in India and the impact can be seen including on stock market too. The impact is very high as some of the stock traders have cancelled their accounts due to sluggish market trading.

From a common man to industrialists, all concern about the high inflation rate which force them to keep their budget proper to meet the market prices. There may be mixed reactions and expectations from the people from every corner of the society regarding the inflation. Some are optimistic that inflation may back to normal rate, as the measures would be effective. But the version from the industry body Assocham is different from this. They feel that inflation may touch 14.5 percent by the end of this year.

Earlier, the expectation of double digit inflation rate has come true. The inflation has remained unabated touching a 13-year high of 11.63 per cent for week ended on 21st June, despite the government and Reserve Bank’s steps to cool the demand for commodities and increased supplies. The inflation has been changed the budget estimation of the people in India and further surge in inflation would prove more adverse for the economy. The inflation has been reportedly affected the defence budget too. If the inflation rate will remain till the end of this years despite good monsoon and effective supply mechanism, then the situation might be out of control.