43 percent in December, data showed Friday, as the government announced steps to curb food prices amid mounting public anger over the cost of living.
The wholesale price index, used as the main measure for inflation in India, accelerated to 8.43 percent in December from 7.48 percent in November, raising the prospect of another interest rate hike later this month.
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The figures will further worry the left-leaning Congress-led government, which has been buffeted by several high-profile corruption scandals and is looking to dampen frustration over spiralling food prices.
Onions have been front-page news for the last month after prices more than tripled from their normal level due to unseasonable rains that spoiled crops late last year.
Food inflation of 16.9 percent over 12 months was at "unacceptable levels," Finance Minister Pranab Mukherjee said on Friday.
"It is a continuing battle," he told reporters in New Delhi on Friday while pointing to the fall in wholesale inflation from its highs of more than 10 percent at the beginning of 2010.
The inflation data and prospects of higher interest rates hit sentiment on the Bombay Stock