Rising food inflation disturbing: Pranab

Finance minister says the govt is taking steps to deal with inflation

Terming the trend of rising prices of food items as 'disturbing', Finance Minister Pranab Mukherjee today said the government will take steps to clear the supply-side bottlenecks to ease the price situation.

"Food inflation in the month of March has increased which is a disturbing factor," he said while commenting on the overall inflation data for the last month.

Inflation declined marginally to 6.89% in March, from 6.95% a month ago. It was 9.68% in March last year.

Pointing out that the government would have been more comfortable had the inflation been closer to 6.5%, he said, "we shall have to be alert on it...Ofcourse the supply side constraint substantially effect food inflation. We will be addressing that."

Inflation in food items rose sharply to 9.94% in March, as against 6.07% in February. Food articles have 14.3% share in the WPI basket.

Mukherjee said, however, he hoped that in course of time inflation will moderate.

During the month, vegetables inflation was as high as 30.57%, as against 1.57% in February.

Also, milk became expensive by 15.29%, while rice and cereals turned costlier by 4.73% and 4.41% respectively.

Potatoes too became costlier by 11.60%, and the price of pulses was up 10.05% in March.

Prices of eggs, meat and fish prices rose 17.71%. The rate of price rise was lower than 20% in February.

Meanwhile, there is widespread expectation that RBI may lower lending rate by 0.25% at its annual credit policy announcement tomorrow, although the inflation rate is still higher than the central bank's comfort level of 5-6%.