Wholesale price index (WPI) based inflation, which reflects the annual rate of price rise, has risen for the second straight month, the cash crunch following demonetisation notwithstanding.
In December and November, it stood at 3.39 per cent and 3.38 per cent, respectively.
In January 2016, the print was (-)1.07 per cent.
The previous high in WPI at 5.41 per cent was witnessed in July 2014.
As per Commerce Ministry data, prices of petrol, diesel, minerals and manufactured items like sugar and fibre witnessed a spurt.
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"Continuous increase in prices of petrol and high speed diesel due to rise in global crude oil prices have to be taken care of by the policymakers since it may have an impact on import bills and subsequent impact on exchange rates," industry body Assocham said.
The rise in WPI is in contrast to the fall in retail inflation to a five-year low of 3.17 per cent in January.
Industrial production too had contracted 0.4 per cent in December 2016 to a four-month low, with consumer durables taking the worst hit on account of the cash crunch post notes ban.
Industry chamber Ficci said the industrial economy is still weak and there is a need to improve the flow of credit to manufacturing and infrastructure sectors.
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