Terming the trend of rising prices of food items as “disturbing”, Finance Minister Pranab Mukherjee on Monday said the government will take steps to clear the supply-side bottlenecks to ease the price situation.
“Food inflation in the month of March has increased which is a disturbing factor,” he said while commenting on the overall inflation data for the last month.
Inflation declined marginally to 6.89 per cent in March, from 6.95 per cent a month ago. It was 9.68 per cent in March last year.
Pointing out that the government would have been more comfortable had the inflation been closer to 6.5 per cent, he said, “We shall have to be alert on it... Of course the supply side constraint substantially effect food inflation. We will be addressing that.”
Inflation in food items rose sharply to 9.94 per cent in March, as against 6.07 per cent in February. Food articles have 14.3 per cent share in the WPI basket.
Mr. Mukherjee said, however, he hoped that in course of time inflation will moderate.
During the month, vegetables inflation was as high as 30.57 per cent, as against 1.57 per cent in February.
Also, milk became expensive by 15.29 per cent, while rice and cereals turned costlier by 4.73 per cent and 4.41 per cent respectively.
Potatoes too became costlier by 11.60 per cent, and the price of pulses was up 10.05 per cent in March.
Prices of eggs, meat and fish prices rose 17.71 per cent.
The rate of price rise was lower than 20 per cent in February.
Meanwhile, there is widespread expectation that RBI may lower lending rate by 0.25 per cent at its annual credit policy announcement tomorrow, although the inflation rate is still higher than the central bank’s comfort level of 5-6 per cent.