Drop in inflation is something to smile about: Mayaram

Encouraged by declining inflation, Finance Secretary Arvind Mayaram today expressed hope that the trend would continue, but said the government will have to remain cautious about impact of possible deficiency in monsoon.

"We are encouraged that the inflation numbers are coming down... On the whole at the moment, it appears that we are on track as far as inflation is concerned...(it is) something to smile about," he said while commenting on the drop in wholesale inflation.

Wholesale Price Index (WPI) in April slowed to 5.2 per cent from 5.7 per cent in the previous month mainly due to easing food and fuel prices.

Mayaram hoped that "as we go forward in the current financial year inflation numbers will be moderating further".

He, however, sounded caution on the possible deficiency in monsoon due to the El Nino effect.

"We believe we need to be cautious and alert. But we have adequate stocks of foodgrains to meet any eventuality. And therefore I do not believe that a slightly sluggish monsoon is going to really impact the supply chain in a manner that will be disruptive," the Secretary said.

On the retail inflation which shot up to 3-month high in April, Mayaram said that during the elections, the Consumer Price Index (CPI) generally inches up.

"There is a lot of expenditure that happens. So obviously there is lot of liquidity in the market. So we should not take this number as something to worry about," he said.

The RBI, which is scheduled to announce bi-monthly monetary policy review on June 3, had kept the key interest rate (repo) unchanged at 8 per cent saying retail inflation was "sticky". The industry has been demanding easing of repo rate to boost economic growth of the country.

On a query regarding the fiscal deficit, Mayaram said it would be 4.6 per cent of the GDP in the last fiscal.

"We still stand by those numbers (fiscal deficit)," he added.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Those willfully defaulting on loans should be blacklisted by Sebi

    As reported by this newspaper’s Monday edition, the Securities and Exchange Board of India (Sebi) has found merit in the Reserve Bank of India’s s

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Kickstarting technological innovation

One of the key dimensions of global competitiveness is the ...

Kuruvilla Pandikattu SJ

Developing moral, spiritual capacity

Writing in The Huffington Post, Noam Chomsky, professor emeritus, MIT ...

Gautam Gupta

Manufacturing must keep workers’ welfare in mind

It may be early days yet, but the labour reforms ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture