Inflation at 13-mth high adds to RBI dilemma

Inflation climbed to 9.78 per cent in August from 8.87 per cent in the corresponding month of last year and 9.22 per cent in July 2011 on the back of food prices heading northwards.

RBI has already hiked policy rates 11 times since early 2010 to tame inflation, but has in fact moderated economic growth.

India’s economic growth fell below 8 per cent for the second quarter in a row at 7.7 per cent during April-June, 2011 against 8.8 per cent in the first quarter of the last fiscal.