Monsoon, policy measures will tame inflation: FinMin report
The Finance Ministry is pinning hopes on a good monsoon and eective policy measures to ease food inflation. It has also cautioned about the global geopolitical situation that can impact commodity prices.
Retail inflation based on the Consumer Price Index eased to 4.83 per cent in April (from 4.85 per cent in March), the lowest in 11 months mainly on account of non-food products. But food inflation inched up to 8.7 per cent from 8.5 per cent largely on pricier vegetables.
According to the Economic Aairs Department’s Monthly Economic Review, released on Friday, the moderation of prices of essential food commodities was broadbased over the past two months, except for a seasonal uptick in some vegetables and pressure persisting in certain pulses. Among cereals, wheat is expected to cool thanks to the procurement. Edible oils remain in deflationary zone.
The report said the rabi harvest is expected to temper prices of key items such as wheat and chana. Forecast of a normal South-West monsoon augers well for food production and the easing of price pressures, the report said.
OTHER SECTORS
About other segments of the economy, the Economic Aairs
Food inflation moved to 8.7% from 8.5% largely owing to vegetable prices.
Department report said that industrial and service sectors are performing well, backed by brisk domestic demand and partially by tentative external demand, especially in Europe and the US.
Reports of the US and Europe focussing on reindustrialisation suggest there will be an eort to step up supply chain resilience. “This can benefit India, as part of the China Plus One strategy,” the report said. EXIM Bank of India has forecast merchandise exports rising in double-digit in Q1.
From the fiscal angle, according to the report, government’s robust capital spending in April-February of FY24, and the FY25 Budget’s fiscal consolidation plan have laid to rest concerns about debt sustainability.
Listing the challenges, the report said the unrelenting geopolitical tensions and volatility in global commodity prices, especially of petroleum products, present substantial multifrontal challenges.