Blaming hoarding of food articles for rising prices, Finance Minister Arun Jaitley on Tuesday asked states to take effective steps against “speculative hoarding”.
“The state governments should take effective steps to ensure that speculative hoarding is discouraged,” Mr. Jaitley said in a post on Facebook.
“The government is committed to take measures which will positively impact the GDP and result in higher growth than expected,” he added.
India’s Wholesale Price Index (WPI) based inflation rose to a five-month high of 6.01 per cent in May against 5.20 per cent in the previous month due to a sharp jump in food and fuel prices, said official data on Monday.
The inflation stood at 4.58 per cent in May 2013.
Reacting on the latest data, Mr. Jaitley said food, fuel and power costs have pushed up the inflation.
“The rise in prices of food articles can also be attributed to withholding of stocks on account of apprehension of a weak monsoon,” the Minister said. “I am hopeful that inflation, which is moving upwards, (will) eventually come down.”
According to the Commerce and Industry Ministry, fuel and power inflation soared to 10.53 per cent in May due to a 14.21 percent jump in diesel prices year-on-year. Petrol prices soared 12.28 per cent.
Food inflation jumped to 9.50 per cent. Potato prices soared to 31.44 per cent. Fruits became costlier by 19.40 per cent year-on-year, while milk price rose by 9.57 per cent.
Poor monsoon and escalating tensions in Iraq were likely to put further pressure on Indian inflation.
On the drop in the value of rupee, Mr. Jaitley said the Indian currency was under pressure due to tensions in Iraq.
The government was watching the movement of the rupee closely, the Minister said. “The slight instability of rupee is essentially because of Iraq oil shocks and global fear of oil price rise.”