SME Times News Bureau | 07 Sep, 2019
Inflation is completely under control and it has
not risen since 2014, said Finance Minister Nirmala Sitharaman on Friday.
"Inflation is absolutely under control. Nobody
can question our government on inflation. Inflation has not risen since 2014.
It was up during 2009-14 (during the UPA-II). The price rise was in two digits
for commodities during that period", she said after interaction with
industry and tax officials here in her continuing series of meetings with
India's retail inflation rate eased slightly in July, staying below the central
bank's 4% medium-term target for a 12th straight month, strengthening views
that there will be a policy rate cut in October.
Annual retail inflation in July was 3.15%, down from an eight-month high of
3.18% in June. The country is currently reeling under a slowdown which is being
debated as both cyclical and structural. There have been demands for RBI to
further cut rates to push growth, scale up consumption and demand. Low
inflation is a key pre-requisite for RBI to cut further interest rates.
Retail food prices, which make up nearly half of India's inflation basket, increased
2.36% in July from a year earlier, compared with an upwardly revised 2.25% in
June. Food prices are likely to remain subdued after a pick-up in rainfall in
several parts of the country, which will boost crops. Core consumer inflation,
which strips out food and fuel prices, was estimated between 4.47% and 4.6% in
July, above 4.09% to 4.11% in June, according to two analysts who estimated
inflation figures released on Tuesday.
Retail inflation in India has eased sharply since November 2013 peak of 12.17%
due to fall in prices of food and oil, as well as sluggish domestic consumer
demand. Low inflation helped Prime Minister Narendra Modi win a second term in
a landslide election victory in May.
While low inflation is helping the economy, declining farm incomes and record
high unemployment have hit consumer demand and economic growth. The government
is worried about declines in private investment and a manufacturing slowdown,
particularly the auto sector, which pulled the annual economic growth pace to a
five-year low of 5.8% in January-March.
Separately, figures showed industrial output increased 2% in June from a year