New Delhi: Finance Minister Arun Jaitley Saturday said that though the economy has recently shown signs of recovery, inflation remains a major concern with the prices of vegetables and food items being affected by seasonal factors and the monsoon.
“Food inflation is a concern; normally at a time when prices of some fruits and vegetables are steep it is natural that there will be some inflation; inflation increases along with growth,” Jaitley said here on the occasion of the National Democratic Alliance government completing 100 days in office.
“In this season the government has taken some special steps to contain inflation, which have been showing results. However, inflation should not grow faster than the income of common man then it becomes a major concern.”
Jaitley further said that there were enough food stocks in the country and hence a poor monsoon was not an issue to worry about.
“Bad monsoon will impact the food produce to some extent but since there are adequate food stocks available in the country, it is not a cause for worry,” he said.
When asked about his expectation of a policy rate cut due to improvement in consumer price index (CPI) and wholesale price index (WPI), Jaitley said: “If left on me I would want a policy revision soon.”
Jaitley added that the apex bank was looking into the issue of policy rates and effects of inflation on the economy.
On the recent figures showing a high fiscal deficit for the first quarter of the current fiscal, the finance minister said it is not representative due to factors of previous quarters affecting it.
“The first quarter deficit is not representative as it takes into account the fiscal needs of the last quarter of previous finance year.”
He said that the current target of containing the deficit to 4.1 percent of the GDP is achievable.
The minister added that he expected the stalled talks on the implementation of goods and services tax between the centre and state governments to move towards some kind of larger consensus.