Pranab hopeful of further decline in inflation

Finance Minister Pranab Mukherjee expressed confidence that inflation would come down further even as the rate of price rise after a gap of five months came down in single digit at 9.97 per cent in July.

"Of course, it will moderate," he told reporters, when asked about the possibility of inflation sliding further in coming months.

"Policy rates had some impact (on sliding inflation) but there are also base factors," Mukherjee said expressing satisfaction over declining inflation.

The Minister attributed slide in inflation of food items to seasonal factors "particularly in respect of some food items like fruits, vegetables and milk".

After remaining in double digits since February, the wholesale price-based inflation fell to single digit at 9.97 per cent in July, owing to decline in prices of certain food and non-food items.

The inflation was at 10.55 per cent in June, while for May it was revised upwards to 11.14 per cent from the provisional number of 10.16 per cent. Inflation entered the double digits in February when it climbed to 10.06 per cent, as per the final figures.

Inflation has become a political sensitive issue with the Opposition raising in within and outside Parliament. Led by NDA, the opposition parties organised an all India strike on July 5 to protest against rising inflation and the hike in prices of petroleum products.