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Expressing concern over rising inflation, the Finance Minister, Mr Pranab Mukherjee, has said both the Government and the central bank are working in tandem to bring it down to a comfortable level.
“Government is working together with RBI to take appropriate steps to reduce inflation to a more comfortable level,” Mr Pranab Mukherjee said today while reacting to the June headline inflation that soared to 9.44 per cent from 9.06 per cent in the previous month.
The statement comes amid wide belief that the Reserve Bank of India will continue with its anti-inflationary measures and hike interest rates by at least another 25 points at its quarterly review on July 26.
It has hiked interest rates 10 times since March 2010 to check inflation even at the cost of growth.
The Finance Minister said inflation figures reported for June “continues to be matter of concern” and asserted that the Government was “monitoring the price situation closely’’.
Inflation has been over 9 per cent since December 2010.
While the Finance Minister’s statement did not elaborate on what the comfortable level for inflation is, according to the RBI the rate of price rise should ideally be 4-5 per cent.
The rise in June Wholesale Price Index (WPI) inflation is attributed to increase in fuel prices effected on May 24, besides seasonal factors and an upward movement in mineral and manufactured prices.
While the general inflation has shown an increase, the index for food inflation almost remained flat in June month-on-month.
Mr Pranab Mukherjee observed that the index for food items stabilised at 8.38 per cent in June against 8.37 per cent in the previous month.
The index for fuel and power segment, which has a weight of almost 15 per cent in the WPI basket, stood at 12.85 per cent year-on-year in June. This was up from 12.32 per cent reported in the previous month.
LPG became expensive by 12.17 per cent on an annual basis, while high speed diesel was up 6.58 per cent. Petrol, whose prices were hiked in April, also became dearer by 30.61 per cent.
Prices of manufactured products, which have a weight of around 65 per cent in the WPI basket, went up by 7.43 per cent year-on-year in June.
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