New Delhi: The government said food inflation has started easing and will fall to an acceptable level of 5-6% in due course, even as the BJP-led National Democratic Alliance and Left Parties went ahead with a nationwide strike to protest against rising prices.
“Food inflation is going down. It will take some time before it really comes into a range which is acceptable to the government and which is good for the people,” finance secretary Ashok Chawla told reporters on the sidelines of a conference on state highways here.
When asked what would be an acceptable range of food inflation, he said it would be 5-6%.
The finance secretary’s statement came on a day when the Opposition NDA and Left Front staged protests against rising inflation and the hike in fuel prices announced by the government last month.
Food inflation declined by almost 4 percentage points to 12.92% for the week ended on 19 June. Several analysts attributed the decline to the base effect, rather than any real decline in prices.
Wholesale price-based inflation, which includes variation in food prices, crossed double digits (10.16% provisionally) in May, but as per final figures, the rate of price rise has been 11% or more since February.
Analysts feel that inflation will increase in the coming days as the impact of the fuel price hike comes into effect.
The government had last month deregulated petrol prices, leading to a Rs3.5 a litre hike, while diesel rates were raised by Rs2 a litre, LPG by Rs35 a cylinder and kerosene by Rs3 a litre.
Meanwhile, the Reserve Bank said on 4 July that managing inflation will remain its main priority.
“For RBI, inflation is everything... for (finance) ministry, it is growth. But in the long run, both will converge... inflation is the biggest enemy,” RBI deputy governor K C Chakrabarty had said.
In an unscheduled move, the Reserve Bank on Friday hiked the lending and borrowing rates (repo and reverse repo) by 25 basis points each to 5.5-4%, respectively.