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Finance Minister Mr Pranab Mukherjee today said that while food inflation has come down, it still remained a matter of grave concern and steps are being taken to bring it down.
“Food inflation has come down from 20 per cent in February 2010 to 8.9 per cent in March 2011. But still it is very high,” Mr Mukherjee said here today.
He said that all the necessary economic measures had been taken to bring down inflation. “We have taken both demand and supply side measures to bring inflation down.”
He said that while there is a short supply in food production, “measures have been taken to improve the supply position.”
Besides, to curb the excessive demand, spurred by rise in disposable income at middle class level, the RBI has been mopping up excess liquidity by varying the repo and reverse repo rates from time to time.
“I hope these two measures will have a sobering effect on inflation”, he said.
The government has revised its inflation forecast for the period ending March 31 to 7.5 per cent from 7 per cent due to a host of problems, including high crude prices. This, however, is still lower than the RBI estimates of inflation at 8 per cent for the given period.
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