“India’s inflation today is at about 6. 9% last month. Our tolerance band is only 4% plus or minus 2% to it. So we could go up to 6%. . . We have breached 6% but not really breached it so badly,” Sitharaman said while participating at a function organised by the Atlantic Council. “Of course, the price burden is on the common man and we are trying to relieve him of that stress,” said the FM as she elaborated on the strategy to steer the economy forward after the Covid impact.
She said the economy faces several challenges such as the rising global crude oil prices and all the commodity prices, which have gone skyrocketing. “These will have an impact on all economies. Notwithstanding the challenges we are now able to stand and move forward. Move forward with a lot more system and process reforms,” the FM said.
Data released by the National Statistical Office (NSO) showed retail inflation, as measured by the consumer price index (CPI), neared the 7% mark at 6. 95% in March, higher than the 6. 1% recorded in February. Food inflation surged 7. 7% during the month from 5. 9%. Separate data has shown that wholesale price inflation shot up to a record 14. 6% in March. It has remained in double digits for the past 12 months in a row.
The breakdown of supply chains as a result of Russia’s invasion of Ukraine has added to the price pressures across the world and India is facing strains in supply of edible oils, metals and other commodities. Rising global crude oil prices have also posed fresh policy challenges and experts believe an increase in interest rates could be as early as June to combat the price pressures.