Union Finance Minister Welcomes Substantial Decline in Core Inflation; Hopeful that Recent Monetary Announcements Would Help in Addressing These Concerns

Union Finance Minister Shri Pranab Mukherjee has welcomed the substantial decline in core inflation from 9.19 per cent in March 2011 to 7.97 per cent, along with drop in inflation for food articles from 9.47 per cent in March to 8.71 per cent in April 2011. Beside it, the Finance Minister said that there is decline in year-on-year overall inflation to 8.66 per cent from 9.04 per cent in March 2011. Shri Mukherjee said that these are welcome trends. However, Shri Mukherjee said that these are not the kind of inflation figures that he is comfortable with. The Finance Minister said that there will be some impact on overall inflation due to the adjustment in the petrol prices effected by the Oil Marketing Companies in the coming months. Shri Mukherjee said that the international scenario on commodity prices also does not appear good at present. Union Finance Minister Shri Pranab Mukherjee said that we will continue to monitor the situation and take necessary measures to address the inflationary pressures in the economy.

Earlier, the provisional Whole Sale Price Index data for the month of April 2011 were released. The Finance Minister said that it is also encouraging to see inflation in manufactured products moderating to 6.18 per cent after showing signs of hardening in the past couple of months. However, inflation in non-food articles is a continued source of concern. It remains elevated at over 27 per cent in April 2011, he added. Shri Mukherjee said that sustained high non-food primary prices create cost-push inflationary conditions in the manufacturing sector. Union Finance Minister Shri Pranab Mukherjee said though there are some signs of moderation in the inflation for manufactured products in April 2011, yet he is hopeful that the recent monetary policy announcements would help in addressing these concerns.

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