Inflation Continues to be Challenging; All Five Major Indices used to Measure Inflation Continues to be in Single Digit Since October 2010, Which is First Time in 17 Months: FM

Union Finance Minister Shri Praban Mukherjee said that the problem of inflation continues to be challenging. He was reacting to the data of WPI inflation released today. The Finance Minister said while the WPI inflation in January 2011, at 8.23 per cent, is lower than the previous month’s inflation of 8.43 per cent, the decrease is too small for him to be comfortable. Shri Mukherjee said that the food article inflation in January 2011 stood at 15.65 per cent which is more than the 13.55 per cent in December 2010. The Finance Minister said that fortunately, the inflation rate of manufactured food declined to (–) 1.3 per cent. The Minister said that overall food inflation is in single digit and stands at 9.3 per cent.

The Finance Minister Shri Mukherjee said even though overall food inflation is a matter of concern, we must remember that we have come a long way from the peak. He said that food inflation rose to 20.21% in December 2009 and peaked in February 2010 at 20.22%, the Minister added.

The Finance Minister Shri Mukherjee said that if we look at all the major indices used to measure inflation, namely, the WPI and the four CPIs, for different segments of the population, it is noteworthy that in October 2010, all these five indices were in single digits. The Minister said that this had not happened for 17 months previous to October 2010. He said all five indices have remained in single digits since October 2010. Shri Mukherjee said while we still have some distance to go in controlling inflation, let us not forget that we have come a great distance from where we were.

Concluding his remarks, the Finance Minister Shri Mukherjee said that fortunately, food prices were in the decline in the last weeks of January 2011 and we still have two months to go before the end of this fiscal year. He is hopeful that the overall inflation will come down close to our target of 7 per cent. The Minister said that this target is still not good enough; and our fight against inflation would continue.

DSM/BY/SAK
(Release ID :69812)