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Wednesday, February 17, 2010

Inflation disturbing; food prices to ease soon: FM

The government today described as disturbing the surge in inflation but was also confident that food prices that were fuelling price rise, would ease in a few months - by when the rabi crop will reach the market.

"That is (rising inflation) is a matter of concern, no doubt...I am afraid...8.5 per cent wholesale price index rise is disturbing," Finance Minister Pranab Mukherjee told reporters on the sidelines of a seminar on transfer-pricing.

He, however, exuded the confidence that inflation rate will ease in the next few months. Inflation rose to over a 13-month high of 8.56 per cent in January from 7.31 per cent a month ago, driven mainly by higher food prices.

Food inflation rose for the third successive week and moved closer to 18 per cent in the week ended January 30.

"We have taken adequate measures on the supply side which will take some time to have the pressing impact on rising prices particularly of essential commodities. I do hope that over a period of few months, it will be possible to have the moderate rate of inflation," Mukherjee said.

Rabi (winter) crop is expected to hit the market starting next month and will considerably ease the price situation.

The government has already made an ad-hoc allocation of 10 kg of foodgrains each to all ration card holders in January and February over and above the existing quota, among other steps, to insulate inflation from hurting the common man

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