Managing Inflation: Govt's Monitoring Seasonal Supply-Side Problems, Says Finance Minister

Union Finance Minister, Nirmala Sitharaman, highlighted that seasonal supply-side problems are contributing to inflation and that the government is continuously monitoring the situation. Speaking at a press conference, she emphasized that various measures are being taken to bring down the prices of essential commodities.

Reduction of Fuel and Natural Gas Prices

Sitharaman noted that the government has taken steps to bring down fuel and natural gas prices, which are imports into the country. She mentioned that since November 2021, the excise duty on fuel has been reduced twice, as per the instruction of the Prime Minister. As a result, the price of fuel has come down somewhat. However, she also highlighted that global factors, such as the impact of Covid-19 and the Russia-Ukraine war, have led to high prices in the global market.

"On prices, since November 2021, when the Prime Minister himself has instructed us to reduce the excise duty on fuel, as a result before Deepavali one announcement was made. Then sometime in June 2022, again we reduced the excise duty further. As a result, price of fuel came down somewhat," Sitharaman said.

Efforts to Control Essential Commodity Prices

The Finance Minister emphasized that the government closely monitors the supply side issues of essential commodities, such as edible oil and vegetables. She mentioned that customs duty on imported edible oil has been reduced to encourage its import and bring down prices. She also highlighted the role of a Group of Ministers (GoM) who continuously monitor the release of stocks and take necessary measures to stabilize prices. For example, when there was an increase in the market price of rice, rice from the buffer stock was released to control prices. Sitharaman said: "We have cut down the customs duty so that the imported edible oil can come, so that the edible oil prices can be brought down."

Continuous Efforts to Tackle Inflation

Sitharaman reiterated that the government is making continuous efforts to bring down prices and control inflation. She mentioned that the Consumer Price Index (CPI) has come down from 6 to 5.8 and 5.7 percent, indicating the government's efforts to manage inflation. She emphasized the need to monitor and address seasonal supply-side problems that contribute to inflation. She said, "When there was an increase in the price of rice, we released rice from the buffer stock." "Efforts are continually being made by the Central government to make sure the prices are brought down. That is why the CPI (Consumer Price Index ) has come down from 6 to 5.8 and 5.7 and so on (all in per cent). So seasonal supply side problems add to inflation which we have to continuously monitor and continuously make efforts to bring down the price," she added.