You are using an older browser version. Please use a supported version for the best MSN experience.

Drop in inflation is something to smile about: Mayaram

LiveMint logoLiveMint 15-05-2014 PTI

New Delhi: Encouraged by declining inflation, finance secretary Arvind Mayaram on Thursday expressed hope that the trend would continue, but said the government will have to remain cautious about the impact of possible deficient monsoons.

“We are encouraged that the inflation numbers are coming down... On the whole at the moment, it appears that we are on track as far as inflation is concerned...(it is) something to smile about,” he said while commenting on the drop in wholesale inflation.

The Wholesale Price Index in April slowed to 5.2% from 5.7% in the previous month, mainly due to easing food and fuel prices.

Mayaram hoped that “as we go forward in the current financial year inflation numbers will be moderating further”.

He, however, sounded caution on the possible deficiency in monsoon due to the El Nino effect.

“We believe we need to be cautious and alert. But we have adequate stocks of foodgrain to meet any eventuality. And, therefore, I do not believe that a slightly sluggish monsoon is going to really impact the supply chain in a manner that will be disruptive,” he said.

On retail inflation, which shot up to a three-month high in April, Mayaram said that during the elections, the Consumer Price Index generally inches up.

“There is a lot of expenditure that happens. So obviously there is lot of liquidity in the market. So we should not take this number as something to worry about,” he said.

The Reserve Bank of India, which is scheduled to announce bi-monthly monetary policy review on 3 June, had kept the key interest rate (repo) unchanged at 8% saying retail inflation was “sticky”. The industry has been demanding easing of repo rate to boost economic growth in the country.

On a query regarding the fiscal deficit, Mayaram said it would be 4.6% of the gross domestic product in the last fiscal.

“We still stand by those numbers (fiscal deficit),” he added.

More From LiveMint

image beaconimage beaconimage beacon