New Delhi: Finance minister Pranab Mukherjee on Monday said there is no room to be complacent about inflation even though the rate of price rise has fallen to 4.39 % now, against the peak of around 13% in August 2008.
“We have weathered the crisis, but there is no room for complacency,” Mukherjee said in his interim budget speech.
Inflation declined by 0.68 percentage points during the week ending 31 January to 4.39% from 5.07% a week ago. It stood at 4.74% in the year-ago period.
Mukherjee said inflation had shot up nearly 13% in the first week of August 2008.
“To ease supply side constraints, the government took a series of fiscal and administrative measures, in concert with monetary policy measures by the Reserve Bank of India,” he added.
Mukherjee said the apex bank raised the interest rates to mop up excess liquidity to check high inflation that time, which in turn, had implications on the growth rate from both demand as well as supply side.
This, along with easing global prices, led to a decline in the domestic prices with inflation rate falling to 4.4% on 31 January 2009, he added.
International prices of many essential commodities, particularly fuel oils, food and edible oils and metals rose to alarming levels. The price of crude oil, which was $28 per barrel in 2003-04 shot up to $147 per barrel in 2008.
The sharp rise in global inflation, even with a moderated pass-through, put pressure on domestic prices, Mukherjee added.