On the day when the Opposition called a complete shutdown to protest against price rise, the Central Government on Monday said food inflation was already on the decline and the downslide would come into the acceptable range of 5-6 per cent but it would take some time.
“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 here.
Food inflation declined by almost 4 percentage points to 12.92 per cent for the week ended June 19. 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 per cent provisionally) in May, but as per final figures, the rate of price rise has been 11 per cent or more since February. When asked what would be an acceptable range of food inflation, he said it would be 5-6 per cent and hoped that it would be achieved by the end of this year.
The Finance Secretary's statement came on the day when the entire Opposition parties called a nationwide strike to protest against the fuel price hike, which disrupted normal life in several parts of the country. Industry estimates said the economic loss ranged between Rs. 3,000 and Rs. 10,000 crore.
While the government is of the view that food inflation would come down, analysts said the overall inflation would increase in the coming days due to the steep hike in fuel prices.
The government had last month deregulated petrol prices, leading to a Rs. 3.50 a litre hike, while diesel rates were raised by Rs. 2 a litre, LPG by Rs. 35 a cylinder and kerosene by Rs. 3 a litre.
The Reserve Bank of India on Sunday stated that managing inflation will remain its main priority. “For RBI, inflation is everything. For the Finance Ministry, it is growth. But in the long run, both will converge as inflation is the biggest enemy,” RBI Deputy Governor K. C. Chakrabarty said.