Govt confident inflation will fall further: Mayaram

The government is keeping close watch on price rise and is confident that inflation will fall further.

"I am very confident that with the measures that the government is now taking and with the growth impulses that we are seeing in the economy inflation must come down," Finance Secretary Arvind Mayaram told reporters on the sidelines of a seminar on the commodities market.

According to latest data, inflation rate based on the new Consumer Price Index fell below estimates to a three-month low of 8.28 per cent from 8.59 per cent a month ago. CPI inflation rate had touched a record high of 11.16 per cent in November 2013.

"This (inflation decline) is something we believe has been a trend for a while and (inflation) will continue to go south," he said.

Adding to some cheer to the economy has been the industrial output for April, which surged to a 13-month high of 3.4 per cent in April, snapping a two-month contracting trend.

On the cut in monsoon forecast by the India Meteorological Department, Mayaram said said the country has enough foodgrain stock to deal with the situation.

"We believe we have a very strong reserve position and the Met department's predictions shows little less rain than what is average, but it is not alarming at this point in time," he said.

The Met department cut its long-range forecast for the southwest monsoon to 93 per cent of the long period average from 95 per cent projected earlier.

The weak monsoon prediction has led to fears of lower crop output, and in turn, threat of higher food prices.

“We are watchful and cautious. We are hopeful that the Iraq crisis will blow over. But I think the market must also remain calm... I don't see any immediate reason for panic. There is no reason to panic as far as India is concerned," Mayaram said.
DH News Service