Global factors responsible for high inflation: Montek

Attributing high inflation to global factors, the Planning Commission today said containing price rise continues to be the top priority of the government.

"Inflation remains the top priority of the government and no one is happy with the present level of inflation. However, it is a global problem today," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters.

Food inflation rose to 8.04% for the week ended July 23 from 7.33% in the previous week.

Finance Minister Pranab Mukherjee has said that efforts were on to bring down food inflation to a comfortable level of around 5%.

"...It [food inflation] should be around 5% which will be comfortable...6-7% can be tolerated but surely not 8%," Mukherjee said while replying to a debate on price rise in Parliament.

The headline inflation is over 9% for June, much above the Reserve Bank's comfort level of 5-6%.

Talking about June-July's deficient rainfall's impact, Ahluwalia said that agriculture production doesn't depend on total percentage of rainfall received. It depends upon the area, which receives it and weather rains come on time.

India's monsoon rainfall is around 95% in the period of June-July, which is slightly below normal.

As per the latest forecast of the India Meteorological Department rainfall for India as a whole during August-September is likely to be 90% of Long Period Average and could affect farm output in some parts.

Referring to Eurozone growth concerns, Ahluwalia said, "The fact that growth in industrialised countries is slow, is not necessarily bad for us. Our growth is more endogenously generated."

At present, European nations like Greece, Portugal, Italy and Spain are facing sovereign debt crisis, which is slowing down the industrial growth rate in these countries.

Moreover, economic indicators from the US are not encouraging, which are causing fear of a global slowdown.

Ahluwalia, however, said that emerging nations would not be impacted by the slowdown in western economies.

He also said that the country should resolve the roadblock for investment in infrastructure, stick to the fiscal deficit target along with easing of financing constraints to sustain the current growth rate of the economy.