Inflation enters positive territory

Rising food prices have pushed inflation into the positive territory after a gap of 13 weeks.
The wholesale price index-based inflation rose to 0.12% for the week ending September 5,up from(-)0.12% in the previous week, raised concerns that the Reserve Bank of India (RBI) could raise rates sooner than expected. The food articles' inflation jumped to 15.4%for the week ended September 5,up from 14.8% in the previous week. Inorder to check soaring food prices, the union Cabinet asked states to regulate stocks of sugar, pulses, paddy , rice and edible oilseeds that traders can keep till September, 2010. The government had earlier empowered states to impose limits on sugar stocks till January 8, 2010, and on pulses, paddy , rice and edible oilseeds till September, 2009.
Buildup inflation in the financialyear so far--or inflation between April 1 and September 5-- was 5.86%, compared to a buildup of 6.62% in the corresponding period of the previous year. India may need to raise interest rates earlier than other countries as inflationary pressures are building up, the Reserve Bank of India (RBI) governor D Subbarao had said at a seminar in the Capital on Tuesday . Subbarao projected an inflation rate of more than 5.2% by March 2010.
However, he said RBI would not reverse its expansionary monetary policy unless the recovery in the economy was secure.