With inflation continuing to rule at uncomfortable levels, Finance Minister P Chidambaram today said there are "no quick fixes" for taming food prices and the monetary policy has little impact on curbing the rate of price rise.
"I have been advised that inflation has got entrenched and monetary policy does not have or has very little impact on food prices and fuel prices," he said, adding that demand for protein based items and fruits and vegetables is high.
The retail inflation, based on Consumer Price Index (CPI), swelled to 10.09 per cent in October, mainly on account of high food prices.
The Reserve Bank has hiked policy interest rate by 0.25 per cent each in September and October to bring down the stubbornly high inflation.
"There is no easy solution to taming food inflation... There are no quick fixes for taming inflation. I am afraid it will take some time to contain this inflation.
"We are paying a political price for that and I acknowledge that but those are the facts," Chidambaram said at the India Economic Conclave here.
He said retail inflation is high mainly because of food and fuel prices and monetary policy can't deal with curbing these prices.
"Demand is being stoked by the fact that we have high fiscal deficit and that fiscal deficit was not contained for a fairly long period, I think over a period of two years," Chidambaram said.
The Wholesale Price Index (WPI) based inflation stood at 8-month high of 7 per cent in October. The rate of price rise in food articles was at 18.19 per cent.
