Economy Recovering But Inflation Still Worrisome: Finance Minister, Food Price Inflation, Indian Food Price Inflation, Indian Economy Recovering Fast, Food Price Inflation in India

Finance Minister, Pranab Mukherjee. File Photo

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SME Times News Bureau | 29 Apr, 2010
Finance Minister Pranab Mukherjee on Wednesday said that despite impressive developments in the Indian economy in the last few months, inflation has remained as the biggest cause for concern for the government.

"The Government has utmost concern about the current price situation. We have taken a number of short term and medium term measures to improve domestic availability of essential commodities and to moderate inflation," Mukherjee said while initiating discussions on the Finance Bill in the Lok Sabha.

The Finance Minister added that prices of essential commodities have started softening and food inflation will decline in the coming months.

"Indications of softening food inflation are clearly visible... It is expected that this would decline in the coming months uninterruptedly," he said.

Food inflation, the minister said, had declined from over 20 percent in December, 2009, to 17.7 per cent in March, 2010.

The minister also recalled the steps taken by the government to deal with general inflation

On India's growth prospect, he said, "The turnaround of the economy which started in the second quarter of 2009-10 is likely to result in a growth of 7.2 percent for the full year 2009-10 as indicated in the Advance Estimates of the Central Statistical Organisation.

He added that impressive recovery of the industrial sector, revival in investment and private consumption demand, favourable capital market conditions with improvement in capital flows and geared up business sentiments will push up growth during the current fiscal.

"Going by these indications and considering that agriculture had a set-back in 2009-10 and is only gradually getting back to the projected path, the Indian economy is expected to grow around 8.5 during 2010-11 and to breach the 9 per cent mark in 2011-12," he said.

The finance minister also stated that the government is firmly committed to the goal of comprehensive tax reform through the introduction of the Direct Taxes Code (DTC) as well as the Goods and Services Tax (GST).