September 09, 2006	Saturday	Sha'aban 15, 1427

NEW DELHI, Sept 8: India's inflation crossed five per cent for the first time in eight weeks, official data on Friday showed, but the government said there was no cause for worry.

The wholesale price-based inflation rate -- India's most widely used inflation monitor -- jumped by a 10th of a percentage point to 5.01 per cent in the week ended August 26, from the previous week. The rate stood at 3.33 per cent in the corresponding week a year ago.

The rise was driven by higher food prices and was within the central bank's 5--5.5 per cent target band for the financial year to March 2007.

It was the first time the rate had topped five per cent since July 1, when it stood at 5.21 per cent.

But Finance Minister Chidambaram said there was no cause for concern.

“This is not something to be alarmed about and the government would do whatever needs to be done to bring it below this level,” Chidambaram told reporters in New Delhi.

“It's our intention to keep it below five per cent,” he said.

“There has been some supply side disruption of vegetables and fruits etc. There continues to be some pressure on wheat and pulses as well,” he said. “We will look at what needs to be done to pull it down.” Economists said that the inflation rise was in line with expectations and driven mainly by seasonal food prices.

“What should be watched is how inflation performs in coming weeks,” said JP Morgan Chase Bank fixed income analyst Siddharth Mathur.

Inflation has been rising in India, prompting the central Reserve Bank of India to hike its trend-setting short-term rate by 150 basis points since October 2004 in a bid to keep a lid on prices in the fast-growing economy. —AFP