Union Finance Minister Nirmala Sitharaman.
| Photo Credit: K.V.S. Giri
The country’s consumer price inflation is now “stable” and within the official tolerance band of 2% and 6%, Finance Minister Nirmala Sitharaman conveyed to the Lok Sabha on Monday, attributing the weakening price rise pressures largely to a steady drop in core inflation.
“India’s retail inflation has declined from an average of 7.1% in April-October 2022 to 5.4% in the corresponding period of 2023. The core inflation [that excludes food and energy costs] has declined from 5.1% in April 2023 to 4.3% in October 2023,” the Minister said in response to a starred question from MP Sushil Kumar Rinku on retail inflation “increasing steeply”.
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Temporary increases in inflation “on a few occasions were caused by demand-supply mismatches arising out of global shocks and adverse weather conditions” and the government and the Central bank had helped resolve such mismatches and rein in inflation through proactive supply side initiatives and effective demand stabilisation measures, she underlined.
“The retail inflation is now stable and within the notified tolerance band of 2% to 6%,” Ms. Sitharaman said, adding that the pace of price had been “mostly within acceptable limits” since the introduction of the tolerance band in 2016.
A steady decline in core inflation had been critical in weakening the inflationary pressure in the Indian economy, she said. Ms. Sitharaman outlined some of the government’s steps to restrain inflation such as easing imports of key food items, preventing hoarding, extending the free food grain scheme for five years from January 2024, and raising the subsidy levels for LPG cylinders.