The government today said inflation surged to 8.56 per cent in January, the highest in over 13 months. Over one-year high inflation was led by costlier sugar and potato prices. Sugar rates rose by 58.96 per cent while potatoes turned costlier 53.39 per cent. The high inflation has fuelled concerns that the apex bank could further tighten the monetary measures initiated earlier this month in its third quarter monetary policy review. Projecting that inflation would touch 8.56 per cent by current fiscal-end, the RBI had sucked out about 36,000 crore rupees from the banking system to check the rising prices. Economists predict inflation to reach 10 per cent by fiscal-end, making the roll back of stimulus measures a tricky issue for Finance Minister Pranab Mukherjee. In the wake of the global slowdown in 2008, the government had announced many sops, including cut in excise duty, to prop up the then slowing economy. Now that the industrial growth is also at 16-month high of 16.8 in December, experts feel the upcoming Budget may see stimulus being withdrawn.