Chief Economic Adviser V Anantha Nageswaran while speaking to reporters on August 31, 2023, said that there seems to be “no real cause for concern” about inflation going out of control. The adviser spoke after the GDP data for April- June 2023 was released. He said that both the union government and the Reserve Bank of India – RBI were watching the price developments rigorously considering there was a lack of sufficient rainfall in the month of August 2023.
Nageswaran said that the core inflation rate is decreasing and food inflation has been dominated by a certain list of commodities. So, considering the overall factors, he suggested no real cause for concern that inflation will rise beyond limits.
He also assured by saying that both the government and central bank are on their toes taking measures in their respective fields so that there is sufficient supply and accessibility and moderation can be done for any price rise.
In recent times, uneven and lack of rainfall and supply shocks have led to a sharp price rise of certain food items like vegetables and pulses. Over the past two months, this increasing trend was noticed by common people which made them live in constant fear and tension on the rising inflation rates of the coming times.
However, the Consumer Price Index – CPI inflation was pushed to a 15-month high of 7.44% in July during which the retail food inflation was more than doubled to 11.5% just after the vegetable inflation rose to 37.3%. Such figures were highest after the COVID-19 pandemic times, in fact, the first of a kind after January 2020.
However, several experts are of the opinion that the government has been working on several measures to ensure that the prices are moderated and do not skyrocket affecting the consumers on a negative note.
The government has introduced measures like tomato sales at discounted rates, a 40% imposition of export duty on onions, an export ban on non-basmati white rice, a 20% export duty on parboiled rice, and open market sales of rice and wheat, among others.
On the other hand, RBI’s Monetary Policy Committee has kept the repo rate without any change at 6.5% for 3 meetings constantly after increasing it rapidly by 250 basis points in 2022-23.
However, economy experts think that the retail inflation really rose around the 7% mark in August, data of which will be released on 12 September 2023. But Nageswaran views that food inflation will reduce once fresh stocks come into the market and enhance the supply situation. He added that the government and RBI will be monitoring both the food price developments and global food price developments to keep situations under control.
Well, at the end of the day, it is always the common man that suffers the most. Irrespective of what the experts opine or share their views about the efforts by the higher authorities, when it pinches to give extra money from the pockets, it is the problem of the common man and that one can understand only when they walk in the general public’s shoes.