Union Finance Minister Shri Pranab Mukherjee said while the current trend in food inflation is welcome and we hope to see further moderation in food inflation in the coming weeks. He said that however, there are concerns on the price momentum in non-food articles. Shri Mukherjee said that sustained high non-food primary prices are creating cost-push inflationary conditions in the manufacturing sector. Thus, even though food inflation is declining, the concern on higher core inflation remains, the Minister added. Union Finance Minister Shri Pranab Mukherjee said that the recent monetary policy announcements should help in addressing these concerns.
Union Finance Minister Shri Pranab Mukherjee said that the provisional Whole Sale Price Index data for Primary Articles and Fuel and Power for the week ending April 30, 2011 has been released. He said that the year-on-year inflation in food articles was 7.70 per cent. Shri Mukherjee said that it has declined near continuously in the month of April 2011 over the same month last year, the decline being sharper in the second half of the month. He said that the inflation in fuel and power has also moderated to 12.25 per cent in this week. Shri Mukherjee said that, however, non-food articles continue to exhibit high inflation in the range of 25 to 28 per cent over the past many weeks. He said that this has made the overall inflation in primary articles sticky and it remains in double digits at 11.96 per cent for the week ending April 30, 2011.
Finance Minister asks for Treating News of Moderating
Inflation for The Week Ending on April 30,2011 and Turn Around in IIP Ffor March, 2011 without over Reaction
Union Finance Minister Shri Pranab Mukherjee said that the comforting news on the inflation front with food inflation moderating from 8.53 per cent to 7.70 per cent in the week ending April 30th, 2011 is matched by a turn-around in Index of Industrial Production (IIP) for March 2011. Shri Mukherjee said that after 4 months of slow growth, the industrial sector in March grew by 7.3 per cent and, within the industrial sector, the manufacturing sector with a weight of almost 80 per cent grew by 7.9 per cent. Union Finance Minister Shri Pranab Mukherjee said that there is also a revival in the growth of capital goods with the Index recording a growth of 12.9 per cent after 3 months of negative growth.
Union Finance Minister Shri Pranab Mukherjee said that these weekly and monthly cycles of bad and good news must be treated without over reaction. The good news that we have got this week both on the prices front and on industrial production must not be over-interpreted, just as we must not get overly pessimistic when the economy does badly during a week or month.