New Delhi, Oct 15 (IANS): India's inflation soared to 7.81 percent in September, the highest this financial year, from 7.55 percent in August as prices of pulses, wheat, cereals, potato and diesel rose, government data showed Friday.

Inflation, based on wholesale price index (WPI), was 10.00 percent in September 2011.

The prices of pulses zoomed 29.28 percent, followed by wheat which was dearer by 18.63 percent. Cereal prices were higher 14.18 percent while those of patato soared 52.20 percent, and of egg, meat and fish went up 12.44 percent.

Overall food inflation was at 7.86 percent against 9.62 percent in the corresponding period of last year. Inflation of primary articles was 8.77 percent.

High speed diesel too affected with a rise of 8.94 percent.

The government had announced the highest ever Rs.5 a litre or nearly 12 percent increase in diesel price in a bid to control galloping fiscal deficit and stave off a ratings downgrade.

The more-than-expected rise in inflation is expected to dash hopes of a rate cut by the Reserve Bank of India which will meet Oct 30, 2012, to take stock of monetary policy keeping in view of the India's slowing economic growth.

C. Rangarajan, chairman, Prime Minister's Economic Advisory Panel (PMEAC), said the rise in the WPI could largely be attributed to the increase in fuel price.

Going forward, he said, inflation would fall. "We could get to about 7 percent by March 2013. That also depends upon how food prices behave in between. Therefore, I would say that the tendency for inflation hereafter would be in the downward direction."

Till then, he added, "The RBI probably would be looking for some sign of a decline in inflation in order to be able to move ahead."

Governor D. Subbarao has said the central bank cannot cut policy rates as inflation remains stubbornly high.

Finance Minister P. Chidambaram Saturday urged the RBI to take "calibrated risks" to support the economy following the government moves to contain the fiscal deficit.