By IANS,
New Delhi: Prime Minister Manmohan Singh has said some aspects that have led to high inflation in India were beyond the government’s control, but policymakers were making all efforts to soften the impact of rising prices on the common man.
“Quite frankly I did not expect the effect of shock injection of liquidity into the system by the United States. I could not anticipate that the Middle East would once again go into turmoil,” Manmohan Singh said Wednesday.
“Commodity prices, food prices, energy prices are variables over which we have no control. And if you exclude these, I think the rest of the inflation is still marginally above what would be considered as inflationary,” he told select editors Wednesday.
Latest data on wholesale price index showed annual headline inflation at 9.06 percent for May. Food inflation at 7.78 percent for the week ending June 11, though, showed a decline after climbing to a two-month high the previous week.
“If oil prices soften and if commodity prices remain where they are, then I asked Rangarajan the other day, and he said that by the end of March, we should have an inflation rate of 6.5 percent,” said Manmohan Singh.
C. Rangarajan, a former Reserve Bank of India governor, chairs the Prime Minister’s Economic Advisory Council.
When a senior editor interjected saying that high prices paid to farmers for procurement was the root cause of food inflation, the prime minister said: “It may be the root of the problem, but that is also our safety net. That agriculture is in good shape.”
He said the granaries were also full to address the issue. “We have all-time high stocks of foodgrain. We have at long last been able to reach out to large numbers of our people.”