New Delhi: Expressing concern over rising inflation, finance minister Pranab Mukherjee on Thursday said both the government and the Reserve Bank of India (RBI) are working in tandem to bring it down to a comfortable level.
“Government is working together with RBI to take appropriate steps to reduce inflation to more comfortable level,” Mukherjee said while reacting to the June headline inflation that soared to 9.44% from 9.06% in the previous month.
The statement comes amidst wide belief that the RBI will continue with its anti-inflationary measures and hike interest rates by at least another 25 points, at its quarterly review on 26 July.
RBI has hiked interest rates 10-times since March 2010 in its bid to check inflation even at the cost of growth.
Mukherjee said inflation figures reported for the month of June “continues to be matter of concern” and asserted that the government was “monitoring the price situation closely.”
Inflation has been over 9% since December 2010.
While the finance minister’s statement did not elaborate on what the comfortable level for inflation is, according to the RBI the rate of price rise should ideally be 4-5%.
The rise in June Wholesale Price Index (WPI) inflation is attributed to increase in fuel prices effected on 24 May, besides seasonal factors and an upward movement in mineral and manufactured prices.
While the general inflation has shown an increase, the index for food inflation almost remained flat in June month-on-month.
The index for the fuel and power segment stood at 12.85% year-on-year in June. This was up from 12.32% in the previous month.
Mukherjee observed that the index for food items stabilized at 8.38% in June as against 8.37% in the previous month.
The index for fuel and power segment, which has a weight of almost 15% in the WPI basket, stood at 12.85% year-on-year in June. This was up from 12.32% reported in the previous month.
LPG became expensive by 12.17% on an annual basis, while high speed diesel was up 6.58%. Petrol, whose prices were hiked in April, also became dearer by 30.61%.
Prices of manufactured products, which have a weight of around 65% in the WPI basket, went up by 7.43% year-on-year in June.