Inflation To Stabilize Post Good Crop Arrival During kharif Season FM (26-Jul-2010)
The Finance Minister of India, Pranab Muhkerjee, has stated that the food price inflation which is hovering at the levels of over 10% for the last consecutive five months will start stabilizing once the new crops arrive in the market. He pointed out that inflation at its present levels, though not in alarming stage, is a point to worry but arrival of new crops would have moderating impact on prices.
He further stated that “Inflation is a matter of concern, no doubt. But there is no magic lamp through which you can bring it down or raise it. I do hope it would stabilise after good crop prospects, which is likely to happen during this kharif season.â€
The FM pointed out that the food inflation which was as high as 20% in December 2009 has now come down to around 12%, though the recent hike in prices of petrol due to its deregulation and other fuel products continue to exert pressure on the prices.
There are expectations that the Reserve Bank of India (RBI) is going to raise the lending and short-term borrowing rates in its scheduled first quarterly review of monetary policy. Prime Minister of India, Manmohan Singh too has expressed his optimism that good crops during the kharif season can see the overall inflation come down to as low as 6% by December 2010.
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