The government provided provisional inflation rates for rural and urban areas for June 2012 which have increased to 9.74% and 10.44%, respectively on a month-on -month basis. Inflation rates for rural and urban areas for May were 9.57% and 11.52% respectively in May 2012.

On Monday, India's wholesale price index (WPI), surprisingly came lower than expectations at 7.25% (provisional) for the month of June, 2012 (over June, 2011) as compared to 7.55% (provisional) for the previous month and 9.51% during the corresponding month of the previous year.

"Certainly high inflation leads to loss of growth, and WPI at 7.25 percent as per the number that came this morning, and CPI inflation in double digits - we are way above that threshold," Subbarao said in a speech after WPI data.

However, the Reserve Bank of India will consider WPI data for inflation, as annual consumer price inflation data was only launched this year.

GoodReturns.in