Food and price inflation to drop substantially by end-July: Basu
16 Jul 2010
According to the government's chief economic advisor the high food and general inflation would come down in the next two weeks.
"It is reasonable to predict that the food and price inflation in two weeks, i.e. by July 29 will be substantially lower than it is now," Kaushik Basu, chief economic advisor to finance ministry, told reporters at a briefing today.
After it dropped for two weeks in a row, annual food inflation in India rose to 12.81 per cent for the week ended 3 July, while the overall inflation was at 10.55 per cent in June.
Basu said however, that an effective and well-rounded food production and procurement strategy was key to keeping supply side pressures on food prices in control.
"Though inflation has gone down and food prices have flattened, there is no denying that we have to work on food production across the board and especially in some items where India is a major consumer," he added.
Meanwhile, fuel inflation eased on lower industrial fuel prices, but due to food inflation snapping back, expectations are that the RBI would go in for a 25-basis points hike in RBI's July policy review.