Govt monitoring inflation situation: FinMin

With the Wholesale Price Index-based inflation at a 5-month high of 6.12 per cent in May, the government on Friday said it is closely monitoring the situation and is taking steps to check price rise.

"Government is closely monitoring the situation and taking measures on an ongoing basis to bring down inflation," Minister of State for Finance Nirmala Sitharaman said in a written reply to the Lok Sabha.

She said some measures have been taken to contain food inflation, which include recommending delisting of fruits and vegetables from the purview of Agriculture Produce Marketing Committee Acts of states and revising the minimum export price to $500 MT and $450 MT for onion and potatoes respectively.

Further, the government has also approved inclusion of onion and potato under the purview of stock holding limits under the Essential Commodities Act, which would help the state government de-hoard the stock and control the prices.

"This decision is expected to help in the efforts being taken to tackle the problem of rising prices and also improve the availability of these commodities to the general public, especially vulnerable sections," Sitharaman added.

The rise in May Wholesale Price Index based inflation has been mainly on account of 31.44 per cent increase in prices of potato, 19.40 per cent in fruits and 12.75 per cent in rice.

The overall food inflation stood at 9.50 per cent.

In a separate reply to another question, Sitharaman said the rise in May inflation was on account of seasonal spike in some vegetables and increase in input cost.

"As the rise in the prices of essential commodities impacts the poor and vulnerable sections the most, government attaches high priority to containing inflation, particularly for essential commodities," she added.

The WPI inflation had touched a peak of 10.23 per cent in October 2013. The retail inflation, based on Consumer Price Index, stood at 8.28 per cent in May.