Prime Minister Narendra Modi on Tuesday said the government will continue to take measures to check rising prices. The statement comes a day after retail inflation, based on Consumer Price Index (CPI), surged to a 14-month high of 7.4 per cent in July.

“I have to take more steps in this direction to minimise the burden of inflation on my countrymen. And we will continue to take those steps. My efforts will continue,” Modi said in his address to the nation from the ramparts of the Red Fort on Independence Day. Retail inflation surged mainly on account of food inflation, led by vegetables. The current level is much more than the targeted range of 2-6 per cent.

Citing various reasons for the rise in inflation, Modi said the world has not yet come out of the adverse impacts of the Covid-19 pandemic; and the Russia-Ukraine war has created an additional problem. “Today the world is facing the crisis of inflation. Inflation has gripped the economy of the whole world. We also import some goods from around the world. Unfortunately, we have to import at inflated prices. So, this whole world has been gripped by inflation,” he said.

He said that the government initiated various measures to control inflation. “Compared to the previous period, we have also had some success, but we cannot be complacent with that. We should not be complacent that our things are better than that of the world,” he said.

On Monday, President Droupadi Murmu said that inflation at the global level remains a cause for worry, but in India the government and the Reserve Bank of India have managed to contain it. Addressing the nation on the eve of Independence Day, the President said that along with economic growth, human development concerns have also been accorded high priority. “The government has succeeded in protecting the common people from high inflation while also providing more extensive security coverage to the poor. The world looks up to India for global economic growth,” she had said.

In its efforts to check price rise, the government has slashed import duties on edible oil, and banned exports of wheat. It has also prohibited export of broken rice and non-basmati white rice. Besides, the government is selling wheat and rice from its buffer stock. Amid a steep rise in the price of tomato, cooperatives, on behalf of the government, are selling the kitchen staple at Rs 50 per kilogram.

The Monetary Policy Committee (MPC), which had hiked the key interest rate by 250 basis points since May 2022, has left the rate unchanged at 6.5 per cent since April. The RBI has the mandate to keep retail inflation in the range of 2-6 per cent and, after remaining above the upper limit for most of the 2022-23 financial year, inflation was in the central bank’s comfort zone this fiscal till June.

Last week, RBI Governor Shaktikanta Das warned of a substantial increase in headline inflation in the near term and revised upwards the inflation forecast for the second quarter to 6.2 per cent.

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