FM says govt to achieve low and stable inflation soon by taking more reform measures to address supply-side bottlenecks
New Delhi : Softening food prices pulled down the wholesale price inflation to near five year low of 2.38 per cent, creating headroom for the Reserve Bank to cut interest rate to boost demand and push industrial growth.
The Wholesale Price Index (WPI) based inflation was at 3.74 per cent in August and 7.05 per cent in September 2013. As per data released by the government today, the food inflation fell to a nearly 33-month low of 3.52 per cent. The sharp drop in WPI inflation, which fell for the fourth month in a row, comes just at the back of retail inflation declining to a record low of 6.46 per cent in September. Wholesale inflation in onion contracted to 58.12 per cent in September as compared to a contraction of 44.7 per cent in the previous month.
While inflation in vegetable basket as a whole shrunk to 14.98 per cent in September, rate of price rise in potato was at 90.23 per cent from 61.61 per cent in the previous month. Attributing the fall in inflation to initiatives taken by the government, Finance Minster Arun Jaitley today exuded confidence that the country is on the way to achieve a low and stable price regime.
“It is heartening to note that we have been able to bring food inflation under control. Growth in vegetable and protein prices that have been contributing to the recent increase in inflation rates have shrunk, thanks to the steps taken by the government,” he said. Commenting on the data, industry body CII said going forward, the downslide in global commodity prices led by fuel together with other factors should help contain inflation.