Finance minister Nirmala Sitharaman vowed to continue the pointed attack on inflation and promised that the government and central bank will keep a strict vigil on the price situation.
Data released by the National Statistical Office on Tuesday showed retail inflation, as measured by the Consumer Price Index, rose an annual 7% in June, nearly at the same level as in May and above the 6. 3% seen in June 2021. Rural inflation was at 7. 1% in June, higher than the 6. 9% in urban areas. The food price index moderated but remained stubborn at 7. 8% in June from nearly 8% in the previous month. The data showed that 11 of the 22 major states and Union territories had an inflation rate above 7% with the highest in Telangana at double digits of 10. 1% and lowest in Bihar at 4. 7%.
“I see the monsoon being favourable to agriculture. Production will be good and rural demand will remain intact. As RBI has estimated, till the start of the second half of the year, both RBI and govt will have to be mindful,” Sitharaman told reporters.
“We will have to be mindful and watchful of the price movement. I will keep monitoring item by item to rein in prices for anything that goes haywire. This pointed attack on inflation will need to continue,” said the FM. Surging inflation has emerged as a major challenge for policymakers around the world as supply chains have been disrupted by the war in Ukraine.
“In July, we expect food inflation to cool, benefitting from the recent downtrend in edible oils prices, whereas the surge in rainfall may cause a temporary uptick in the prices of perishables,” said Aditi Nayar, chief economist at ratings agency ICRA.
“The cut in excise duty on petrol and diesel drove the downtrend in the transport and communication sub-index of miscellaneous items, whereas the services sub-indices reported a pickup in inflation that needs to be watched very carefully,” said Nayar.