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Good farm produce, price curbs have brought inflation under control: Economic Survey

Author: IANS/Tuesday, January 30, 2018/Categories: Economy

Good farm produce, price curbs have brought inflation under control: Economic Survey

New Delhi - Headline inflation measured by the Consumer Price Index (CPI) has remained under control for the fourth successive year which "has been possible due to good agricultural production coupled with regular price monitoring by the government", the Economic Survey 2017-18 said.

"In fact the decline in the inflation in the first half of the current fiscal year was indicative of a benign food inflation which ranged between (-) 2.1 to 1.5%," the Survey placed in Parliament by Finance Minister Arun Jaitley revealed.

According to the Survey, inflation in the country continued to moderate during 2017-18 with the CPI based headline inflation averaging 3.3% during the period -- the lowest in the last six financial years.

The Survey pointed out that the decline in the inflation was broad-based across major commodity groups except housing and fuel and light.

"The headline inflation has been below 4% for twelve straight months, from November 2016 to October, 2017 and CPI food inflation averaged around one per cent during April-December in the current financial year," said the Survey.

However, the rise in food inflation in recent months is mainly due to factors driving prices of vegetables and fruits, it said.

"In rural areas while food was main driver of CPI inflation during 2016-17, in urban areas housing sector has contributed the most to inflation in the current financial year," the Survey highlighted. 

State-wise inflation data during the fiscal showed that many states witnessed sharp fall in CPI inflation with 17 states' inflation below 4%.

This has been possible due to various efforts made to contain inflation at various level by the government, said the Survey.

The Survey also highlighted the measures taken by the government for controlling inflation like issuing advisories as and when required to state governments to take strict action against hoarding and black marketing for commodities in short supply, and holding regular review meetings at the highest level on price and availability situation.

"Higher MSP (minimum support price) has been announced so as to incentivise production and thereby enhance availability of food items which may help moderate prices. A scheme titled Price Stabilisation Fund (PSF) is being implemented to control price volatility of agricultural commodities like pulses and onions," the Survey pointed out.

"The government approved enhancement in buffer stock of pulses from 1.5 lakh MT (million tonne) to 20 lakh MT to enable effective market intervention for moderation of retail prices. Accordingly, a dynamic buffer stock of pulses of upto 20 lakh tonne has been built," it added.

In its control measures, the government imposed 20% duty on export of sugar for promoting availability and moderating price rise, and permitted import of 5 lakh tonne of raw sugar at zero duty along with additional 3 lakh tonne at 25% duty.

"Export of all varieties of onion will be allowed only on letter of credit subject to a minimum export price (MEWP) of $850 per MT till December 31, 2017. States/union territories have been advised to impose stock limit on onions," the Survey added.

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