India has not breached inflation so badly, says FM Sitharaman

Even as retail price inflation breached the official target by nearly one percentage point in March, Finance Minister Nirmala Sitharaman has said the country has not breached inflation "so badly".

The finance minister said this at an event in Washington DC where has gone to participate in the IMF-World Bank spring meeting.

"There are global challenges, whether it is the crude price whether it is the prices of commodities which have gone skyrocketing.... India’s inflation today is at 6.9% last month. Our tolerance band is only 4%, plus or minus 2%. So we could go up to 6%. We have breached the 6%, but we have not really breached it so badly,” she said.

Also Read | Temporary aid can offset inflation hit to families: IMF

Official data last week showed India's retail price inflation has surged to a 17-month high of 6.95% in March from 6.07% in February. This is the third month in a row that inflation has breached the target set by the government.

Experts say retail inflation will be higher in the coming months after the full impact of petrol and diesel prices pass through is reflected in the inflation data.

Petrol and diesel prices have been hiked by Rs 10 per litre since last month.

The finance minister said the government was aware of the price burden on the common man and was trying to relieve them.

Also Read | March WPI inflation rises to 14.55%

"Of course, the price burden is on the common man. We are trying to relieve them of that stress. But notwithstanding the challenges, we are now able to stand up and move forward with system reforms," Sitharaman said.

Food prices, which account for nearly half of the retail price inflation basket are also likely to remain elevated due to seasonal hikes in vegetable prices, which usually go up in summer and, supply disruption.

It is due to fast-rising retail inflation that the Reserve Bank of India Governor Shaktikanta Das said earlier this month that the central bank's focus has now shifted to taming inflation.

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