India Inflation rises to 8.75 Percent

Indian Economy is headed for a slow down. The inflation data published today shows that it has soared to a seven year high of 8.75 per cent for the week ended May 31 compared to a 8.24 percent in the previous week. Rising food and vegetable prices including cereals, milk, spices and manufactured goods have contributed to 0.51 percent increase.

RBI as a preemptive measure announced the increase in its short term lending rate by 25 basis points. This is the highest level of inflation since the Congress led alliance UPA has taken charge at the center and many parties have started calling for the resignation of the finance minister Chidambaram.