Monsoon not a worry, food prices will be under check, says CEA

 Despite the initial forecast of a less than usual rain this monsoon, price rise or inflation in essential commodities will not be a problem as the government has adequate food stock in its granaries, Chief Economic Advisor (CEA) Arvind Subramanian said on Tuesday.

“One factor that is going to affect inflation, going forward, is the monsoon, but we do have adequate stocks, and we will be able to contain inflation even if the monsoon doesn’t turn out to be so good,” Subramanian said at a press conference to mark one year of the Narendra Modi government.

His assurance comes at a time when prices of pulses, one of the most commonly consumed foods in India, is touching the roof. The Consumer Affairs Ministry data showed urad dal is being sold in the range of Rs 105-123/kg in metros, as against Rs 64-80/kg, a year ago. Similarly, prices of arhar or tur dal have shot up 53 per cent since last year.

The wholesale price and retail inflation, however, has receded sharply in the past five months, according to officials figures. “CPI inflation is down at about five per cent, the latest reading, and WPI inflation is in negative territory... the latest reading was of course (-)2.7 per cent,” the CEA said. He said the inflation is likely to remain at 5-5.5 per cent, as was projected by the Economic Survey.

He said that the quality of the government’s fiscal consolidation and lower crude oil prices also lent support to softening of inflation in the past as many months.He expressed the hope that the oil prices were going to remain in the range of $50-$80 during the rest of the year.