“...it should have been ideal if the rate of inflation was three to four percent, but I am not advocating for that. I will be happy if we could maintain the rate of inflation at around 6.5 per cent throughout the year because I know the constarints,” he said while replying to a debate on the General Budget in the Rajya Sabha.
In February, inflation as measured on Wholesale Price Index (WPI) rose to 6.95 per cent against 6.55 per cent in the previous month.
Besides, supply side constraints and oil prices are important contributor to the inflation basket. E
xpressing concerns over the rising prices of crude oil in the international market, the Finance Minister pointed out that if prices increase further it would become difficult to import the commodity.
“If the oil prices go up to USD 150 or 160 or 200...would the economy be in a position to import even the necessary requirement looking at the size of the Indian economy?” he said and sought cooperation from all political parties to address the issue.
While petrol prices are deregulated in the country, the government provides subsidies to oil marketing companies for sale of diesel, LPG and kerosene.
The government had proposed to bring down the non-food subsidy to below two per cent of the GDP in the next fiscal, and 1.75 per cent in the following three years.