Union Finance Minister Nirmala Sitharaman on Wednesday told Parliament that the government will work to further bring down inflation. The price rise indicator for November eased below the Reserve Bank of India’s upper tolerance level for the first time this year.
Retail inflation came down to 5.88% in November from 6.77% in October, government data released on Monday showed. Retail inflation had been above the upper-end of the central bank’s 2%-6% tolerance band since January. It had reached an eight-year high of 7.8% in April.
Data released on Wednesday showed that India’s wholesale inflation rate also eased to its lowest in 21 months. It fell to 5.85% in November from 8.39% in October.
While speaking in the Lok Sabha on Wednesday, the finance minister said the government is constantly monitoring the price rise of essential commodities. “We will bring down [inflation] further for the sake of common people,” she said.
To rein in inflation, the Reserve Bank of India had last week hiked the repo rate by 35 basis points, or 0.35% to 6.25%. Since May, the central bank has raised the key policy rate by 225 basis points, or 2.25%.
On Wednesday, Sitharaman also assured that India will not suffer from stagflation – a term used to describe an economy that is witnessing stagnant growth and in which prices keep soaring.
She added that the government would be able to meet the fiscal deficit target of 6.4% of the Gross Domestic Product for the current financial year.
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