‘Open to using trade policy to curb prices’
NEW DELHI : The government has taken several steps to tame inflation, including supply-side measures such as releasing substantial cereal stocks from reserves, proactive import-export management of pulses to ensure supplies and restriction of exports of rice and sugar, finance secretary T.V. Somanathan said. The government is open to using trade policy measures, as and when required, to curb inflationary pressures further, Somanathan said.
Trade policy measures could include restricting imports and exports to address domestic supplies. India’s retail inflation accelerated to a 15-month high of 7.44% in July as food and vegetable prices surged, breaching the Reserve Bank of India’s (RBI) inflation target range for the first time since February. Higher inflation will add pressure on RBI’s monetary policy committee (MPC) to increase rates.
Last week, the panel opted to keep the repo rate unchanged at 6.50% for the third consecutive time. Food inflation measured by the consumer food price index (CFPI), which accounts for nearly half of the overall consumer price basket, quickened to 11.51% in July from 4.55% (revised) in the preceding month, registering its highest level since October 2020, according to data released by the ministry of statistics and programme implementation (MoSPI). Vegetable prices are expected to ease in the coming months, Somanathan said, adding that the government will take more measures to control inflation.
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