Checking price rise without hurting growth challenge: Pranab

Finance Minister Pranab Mukherjee said the challenge before the government and the RBI is maintaining price stability without hurting growth, even as economists made a strong case for improving agriculture productivity to tame rising inflation.

New Delhi: Finance Minister Pranab Mukherjee said the challenge before the government and the RBI is maintaining price stability without hurting growth, even as economists made a strong case for improving agriculture productivity to tame rising inflation.
 
"...the economic advisors tell that we are likely to end the year with 9 percent (average) inflation for the year 2010-11," Revenue Secretary Sunil Mitra told reporters here.

The inflation has been a major concern throughout the year, mainly driven by rising prices of essential food items including onion, other vegetables, fruit and milk.

Last fiscal, wholesale price inflation stood at 3.8 percent, Minister of State for Finance Namo Narain Meena had said.

The year 2010-11 started with inflation of 9.59 percent in April, which went into double digit for the month of May and June at 10.16 per cent and 10.55 per cent, respectively.

Adding to the woes of the government, the overall inflation in December stood at 8.43 per cent, mainly due to rising food prices.

The contribution of food inflation to overall inflation could be gauged from the fact that 'manufactured' inflation, in fact, came down to 4.46 per cent in December from 4.56 percent in the previous month.

Vegetable prices rose by 22.90 percent in December versus the previous month. Within vegetables, onions turned expensive by 34.86 per cent and potato by 16.29 percent.

Finance Minister Pranab Mukherjee had said the current rate of inflation is "unacceptably high". He also discussed the issue with state finance ministers on January 19 this year.

Both Finance Ministry and Prime Minister's Economic Advisory Council expect wholesale price inflation to be around 7 percent by March-end.

PTI

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