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Pranab Mukherjee: No room for complacency on inflation

New Delhi, Sep 14 (Calcutta Tube) Wholesale price index (WPI) inflation, which declined to 8.51 percent in Aug from 9.78 percent in the previous month, does not offer room for complacency and the government will remain vigilant to curb the inflationary trend, Finance Minister Pranab Mukherjee said Tuesday.

‘While the lower inflation is a source of satisfaction I am still not satisfied with the level of inflation and will continue to work to bring it down further,’ Mukherjee said in a statement.

He said prices of some commodities, especially wheat, have shown inflationary tendency in international markets that might put pressure on India.

Wheat price has risen sharply because of production shortfall in Russia and Ukraine.

‘We must continue to be vigilant and be prepared with the instruments of fiscal and monetary policy to use them as and when the need arises,’ he said.

According to data released by commerce ministry Tuesday, overall inflation in August witnessed a fall of 1.27 percentage points from 9.78 per cent in the month of July, as per the new series, which considers 2004-05 as the base year.

Mukherjee pointed out that inflation has declined across all major commodity groups including food inflation. WPI inflation for fuel, power, light and lubricant has come down along with for manufactured products.

Among the increases, there has been a small increase of approximately half a percentage point in the WPI inflation of non-food primary articles.

On adoption of new series, finance minister said the weight on food has gone down slightly in the new index which reflects the fact that with increasing per capita income the fraction that the average person now spends on food has gone down a little.

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