NEW DELHI: India's annual consumer inflation eased slightly to 7.01% in June from 7.04% in the previous month, mainly due to marginal slide in prices of vegetables and pulses, but remained woefully high and beyond the central bank's tolerance threshold for the sixth month in a row. The consumer price index based inflation stood at 6.26 per cent in June 2021.
With hardly any let-up in inflation, Finance Minister Nirmala Sitharaman said there would be item by item monitoring of prices. "We will have to be mindful and watchful of the price movement," she said. "I will keep monitoring (prices) item by item watchful of anything that goes haywire. This pointed attack on inflation will need to continue."
Inflation in the food basket in June 2022 was 7.75 per cent, compared to 7.97 per cent in the previous month, as per the National Statistical Office data released on Tuesday.
A wire agency quoted economists as saying retail prices are showing little sign of cooling despite the Reserve Bank of India raising its benchmark repo rate by 90 basis points over the last two months and the government slapping export curbs on wheat and other food items.
The RBI will have to explain the reasons to the government if it stays above 6% for one more quarter, an online media report said.
Widening trade and current account deficits owing to high global crude oil prices have pushed the rupee to a recent record low, raising further concerns over higher imported inflation.
Governor Shaktikanta Das had last month said the global geopolitical situation remains fluid and commodity markets remain on an edge, rendering heightened uncertainty to the domestic inflation outlook.
However, certain positive developments such as expectations of a normal south-west monsoon, recent supply side measures as well as lifting of palm oil export ban by Indonesia may help ease the acute price pressures to some extent, he had said.
This view was reinforced by the finance minister who said on Tuesday a favourable monsoon will lead to good production and rural demand.
IIP GREW THE HIGHEST
India's industrial production grew the highest in a year at 19.6 per cent in May 2022, mainly due to strong performance by manufacturing, power and mining sectors, according to the government data released on Tuesday.