The Government adds that edible oil and pulses are the main contributors to inflation and that the prices will stop rising after the new harvest comes into the market.
Major contributors to inflation are edible oil and pulses, and to boost their availability in the market, the supply side has been touched on through cuts in duties, a senior finance ministry official said. On the issue of petrol prices, Finance Minister Nirmala Sitharaman on Wednesday reiterated that the Centre will have to coordinate with states on ways to reduce the taxes and duties.
Revenue Secretary Tarun Bajaj said inflation will fall once the crop harvests come into the market, and expected it to be within 4-6 per cent.
“The RBI has come out with a guidance on inflation and said that the inflation, which is a little on the up, will cool down in some time, and we also feel that once the crops come out, inflation should come down,” he said.
He added that the strategy to reduce a rise in prices is that the government has reduced duties on a number of products, which are edible oils and pulses. “The major inflation that is happening is in these components. We have reduced that duty, we have ensured extra pulses and edible oils are coming from outside the country so that the supply side is improved.”
Inflation cooled down to 5.59 per cent in July, and the Reserve Bank of India (RBI) expects it to remain at 5.7 per cent in 2021-22. Sitharaman said the food inflation has come down. Due to supply chain disruptions during the coronavirus time, it had breached the six per cent level, she added.
Meanwhile, when asked about concerns about the reasoning on oil bonds, Sitharaman stood by her remarks made earlier and said blamed the UPA Government for the oil bonds for which the current government is paying.
On reduction of duties and taxes on oil products, Sitharaman said the Centre will have to sit with states to find a solution.