{"id":184675,"date":"2023-08-28T05:26:41","date_gmt":"2023-08-28T05:26:41","guid":{"rendered":"https:\/\/indiansapidnews.com\/?p=184675"},"modified":"2023-08-28T05:26:41","modified_gmt":"2023-08-28T05:26:41","slug":"inflation-will-reduce-in-next-three-months","status":"publish","type":"post","link":"https:\/\/indiansapidnews.com\/india\/inflation-will-reduce-in-next-three-months\/","title":{"rendered":"‘Inflation will reduce in next three months’"},"content":{"rendered":"
The central government will take a medium-term view while intensifying efforts to reduce the inflationary burden, and will avoid any knee-jerk reaction to transitory price rises, Finance Secretary T V Somanathan told Business Standard<\/em> in New Delhi.<\/p>\n “The government has taken a number of measures for inflation control. They are ongoing and will be intensified. But I would also say that these decisions have to be taken with a medium-term view, and not necessarily based on one-two weeks\/months figures, as they may have an impact on trade policies and have consequences over a longer period. So they have to be taken carefully,” Somanathan said.<\/p>\n India’s retail inflation hit a 15-month high of 7.44 per cent in July, breaching the Reserve Bank of India’s upper tolerance level of 6 per cent for the first time in five months.<\/p>\n Citing measures taken by the government to cool down inflation, Somanathan, the senior-most bureaucrat in the finance ministry, said: “We are engaging in substantial open market sales of both wheat and rice to control food inflation; special measures of market intervention in vegetables, pulses and oil seeds were also taken to cushion the impact.”<\/p>\n “Some steps are beginning to take effect while some will continue to take effect,” Somanathan added.<\/p>\n The high inflation rate in July was driven by a spurt in prices of vegetables, led by tomatoes.<\/p>\n Vegetable prices shot up 37.3 per cent annually during the month, while pulses, cereals, and spices witnessed double-digit inflation rates.<\/p>\n The finance secretary said the surge in prices was a temporary seasonal phenomenon which would recede soon.<\/p>\n “I think inflation will be reduced in the next three months. So I would not advocate taking policy action based on the one elevated figure of this month,” he added.<\/p>\n Somanathan said there were distinctly identifiable seasonal factors which had elevated the inflation rate, and those commodities which were undergoing a very rapid price increase and a big role to play in inflation were bound to abate when crops came in.<\/p>\n Prime Minister Narendra D Modi in his Independence Day speech promised to take more measures to minimise the burden of inflation on households.<\/p>\n On global slowdown and whether it poses risk to Indian exports, Somanathan said: “It will impart a certain downward push to our growth but I think we can overcome that through sustained domestic economy.”<\/p>\n Trade data released by the commerce ministry on showed merchandise exports contracted for the sixth consecutive month in July, by 15.9 per cent Y-o-Y to $32.25 billion amid tepid global demand.<\/p>\n “If major economies which are buyers of Indian imports undergo slowdown, it will have an impact on India exports, and that’s inevitable. However, India is not a very export-dependent economy in comparison to many other nations. So the effect on Indian economies will be relatively less than other economies,” Somanathan added.<\/p>\n On the growth rate of industrial production easing to 3.7 per cent in June, Somanathan said it’s transitory in nature and not worrisome.<\/p>\n On overall revenue collection — both direct and indirect taxes — Somanathan said it looked okay so far.<\/p>\n Feature Presentation: Aslam Hunani\/Rediff.com<\/em><\/strong><\/p>\n