Pranab Mukherjee feels inflationary fluctuations will occur in coming months

Thursday, February 3, 2011

NEW DELHI - Asserting that inflationary pressures are not unusual in a ‘complex’ economy such as India, Union Finance Minister Pranab Mukherjee has indicated more fluctuations will occur in economy in the coming months.

India is currently battling soaring price rises, causing a major headache for the ruling government, but policymakers have cautioned against panic reaction.

Reflecting on the issue, Mukherjee said that despite inflationary fluctuations, the overall trend of prices would moderate in the next three months.

“Though there have been fluctuations, monthly or weekly, during these last nine months, inflationary pressures there have been fluctuations. At one point of time…food inflation went as high as 18.32 percent. In a complex and large economy of India, these type of periodical fluctuations are not unusual. In the remaining three months also there may be some fluctuations, but the overall performance has been well,” said Mukherjee.

He further said India would end the fiscal year with a ‘better-than-projected fiscal balance,’ which would be lower than the government’s earlier projections.

“Fiscal deficit has come down compared to last year. Revenue deficit has come down compared to last year. The detailed figures will be given to you,” said Mukherjee.

The Minister said while the current fiscal situation has been aided by the more than anticipated realisation in non-tax revenues, it has also afforded the opportunity to increase plan and other developmental spending in the course of the year.

India’s annual food inflation accelerated to 18.3 percent in the week to December 25, its highest level in more than a year, from 14.4 percent in the previous week. (ANI)

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