Reserve Bank of India.
Credit: Reuters Photo
The government will take a medium-term view to intensify efforts to ease inflation pressures and avoid any knee-jerk reaction to transitory price increases, Business Standard reported on Thursday, citing Finance Secretary T V Somanathan.
The government has taken a few measures to control inflation. The measures are ongoing and will be intensified, Somanathan told Business Standard, adding that the decisions have to be taken with a medium-term view and not based on the data for one-two weeks or months.
India's retail inflation in July rose to 7.44 per cent, its highest in 15 months, breaching the Reserve Bank of India's upper tolerance level of 6 per cent for the first time since February 2023, as food and vegetable prices surged in the country.
"We are engaging in substantial open market sales of both wheat and rice to control food inflation," said Somanathan, adding that special measures of market intervention in vegetables, pulses and oil seeds are also being taken to cushion the impact.
India will offer 5 million metric tons of wheat and 2.5 million tons of rice to bulk consumers in an attempt to cool domestic prices and restrict exports of both staples.
"I think inflation would be reduced in the next three months," Somanathan said. The surge in prices is a temporary seasonal phenomenon, he added.
The finance secretary did not immediately respond to Reuters request for comment.